In a challenging business environment, small businesses can leverage data-driven insights to be more efficient and effective at every level.
2020 was a devastating year for small and medium-sized businesses (SMBs). It's estimated that 81% of SMBs lost money in the past year, and, according to Yelp, more than 56,000 SMBs went out of business between March and May 2020. Unfortunately, the most significant challenges are likely still up ahead. According to a survey by Metlife and the U.S. Chamber of Commerce, 70% of SMB owners continue to be concerned about the financial hardships and prolonged closures prompted by pandemic response initiatives.
What’s more, SMBs face significant pressure from enterprise corporations, which come with substantial cash and personnel advantages. As one particularly concerned Washington Post columnist warned, "Giant corporations may be the only survivors in the post-pandemic economy."
His prognostication is almost certainly an exercise in hyperbole, but corporations are increasing their market share in virtually every sector, forcing many SMBs to consolidate, sell out or close their doors. When coupled with a rapid move to online shopping, continued pandemic restrictions and shifting customer sentiment, it's clear that SMBs will need to find new ways to differentiate themselves to compete in a rapidly changing business landscape.
SMBs can level the playing by harnessing digital information to chart new data-driven paths forward.
Even while budgets were relatively restrained, sales of employee monitoring software surged as companies provided oversight of newly remote teams. The data derived from this incredibly capable software contains powerful insights that enable SMBs to identify new efficiencies, maximize existing opportunities and optimize for a new normal.
Here are three ways that SMBs can use this information to remain competitive in the year ahead.
1. Foster healthy teams.
Not only did an uncertain economy this year place stress on employees at every level, but many were working in new environments while managing novel household responsibilities, professional obligations and pandemic restrictions – all during a global healthcare crisis. It was a lot to handle, and the workforce is reeling.
At the same time, many employees worked more hours than ever before, leading to unprecedented burnout, exhaustion and discontent. A survey by the Society for Human Resources Management found that more than half of respondents reported high levels of burnout. Further, despite the extra work time, employee productivity plummeted, creating a perfect storm that SMBs will need to mediate in the year ahead.
Flourishing companies are predicated on thriving employees, and competitive SMBs must take steps to restore employee well-being while fostering healthy teams for the future. While embracing communication best practices is an obvious next step for every SMB, employee monitoring data can help companies take more precise actions to foster healthy teams. This includes:
Encouraging work/life balance. Understanding your employees' work habits empowers leaders to do more than pay lip service to healthy work/life balance. For instance, if your team members are routinely working after hours, it may be time to reconsider their professional priorities and to reevaluate realistic roles and responsibilities.
Promoting flexibility. SMBs should provide as much flexibility as possible. Many workers will continue juggling multiple responsibilities well into 2021, and creating a permission structure for flexible work arrangements can alleviate stress across the board.
Maximizing opportunity. Sometimes, alleviating stress and anxiety just requires making data-driven decisions about work-related tasks that, while necessary, don't ultimately drive outcomes. For instance, identifying when employees are most productive and avoiding those windows when scheduling meetings or planning companywide events positions maximizes output, reduces anxiety and promotes efficiency at a time when it's desperately needed.
In the wake of pandemic-related restrictions, many small businesses struggled to retain or rehire essential staff. By applying a data-driven approach to fostering healthy teams, SMBs ensure that they are best positioned to compete against their well-staffed enterprise competitors.
2. Pursue better outcomes.
Too often, activity serves as a poor stand-in for productivity. We equate long hours, millions of mouse movements and always-on email hallmarks of committed and, theoretically, effective workplace behavior. In reality, this is mostly a myth.
One Stanford study on workplace productivity found that work time became "pointless" after employees reached a certain threshold – typically about 55 hours a week.
Simply put, more doesn’t necessarily equate to better, and SMBs can leverage this reality to reorient their approach to productivity. Specifically, they should consider adopting an outcomes-based approach to projects, providing employees specific tasks, and relying on data-driven insights to assign and oversee those projects.
By turning to project-based metrics rather than activity standards, SMBs empower their employees to tackle the things that matter most while continuing to promote healthy teams and thriving companies.
3. Account for changing risks.
Cybersecurity was a significant challenge for SMBs before the pandemic, and it's even more essential now. A hybrid workforce comes with a litany of new risks and high costs, including repair, restoration and reputation damage. Since nearly 80% of customers will abandon a business forever and more than 60% of SMBs will go out of business after a data breach, adapting to defend against the latest trends must be a top priority.
In a hybrid work environment, many cybersecurity risks are associated with insiders, including increased phishing scams, accidental data exposure and malicious theft. These trends are exacerbated by blurred lines between personal and professional technology, an uncertain economy and the perception of lax oversight, but SMBs are not powerless to act. Leveraging data from their monitoring efforts, they can:
Verify that employees are using work-issued technology to access and transmit company and customer data.
Identify workers who are prone to accidental mishaps while implementing real-time training to support data security.
Assess employee competency in data management best practices.
Restrict access to sensitive data or nonessential IT.
Prevent employees from removing, sending or sharing company data.
Cybersecurity might not feel like a natural pillar of strategic planning, but it's often table stakes for remaining competitive now and in the years ahead. By leveraging cybersecurity-related data, leaders can make precise decisions to bolster their defensive posture without significantly increasing cybersecurity budgets or placing onerous burdens on IT personnel.
When times are tough – and for many, "tough" is an understatement – it's tempting to be reactionary rather than strategic. We want to move fast and fix things, hoping that quick action will solve seemingly insurmountable challenges.
In contrast, a more effective response is measured. Before demanding changes, reorienting workflows, and instituting new priorities, assess and reflect on your starting point. Dive into the data, evaluating the challenges, opportunities and hurdles to a thriving business.
While not all challenges can be overcome by improving internal elements, it's the most tactile and tangible next step for leaders looking to make the next year better than the last.