LOS ANGELES--(BUSINESS WIRE)--Small businesses owners and CEOs are feeling optimistic about the US economy, but are struggling to find and retain talent, according to a new survey by Counterpart, the AI-driven insurtech backed by Aspen and Markel. Counterpart’s 2023 Small Business Trends Report highlights the range of challenges facing SMBs following a period of sustained high inflation and a persistently competitive jobs market.
The report, which surveyed over 300 small business owners and CEOs across the US, reveals that nearly half (45%) say the economy has improved, signaling that the recovery has trickled down to smaller businesses. More than half (54%) say they are very optimistic about their business outlook despite ongoing challenges. But the aftermath of the Great Resignation is still causing a headache; 48% say retention and turnover has been their biggest challenge, followed closely by recruitment and talent acquisition (44%).
Rightsizing the Workforce
Small business leaders are continuing to make layoffs, with nearly half (41%) of all owners and CEOs saying their business is likely to conduct layoffs. At the same time the overwhelming majority (92%) say they are currently or planning to hire, and almost one-third (31%) say recruiting and hiring will be the biggest challenge in the next year.
“Small business leaders are incredibly resilient. They are very sober to the realities of the market after having to make some difficult decisions that impact their customers and employees, but maintain a positive outlook on their business and the economy,” says Tanner Hackett, CEO and Founder of Counterpart. “For example, the report indicates that they are simultaneously rightsizing their operations with continued layoffs, while pursuing new talent that may be better aligned with the evolving market conditions and needs of the organization.”
Inflation Worries Persist
Nearly two-thirds (64%) of small business owners and CEOs said that inflation was the biggest challenge they’d faced in the past year followed by supply chain disruption (36%), recruiting and hiring (33%), and employee retention (33%). Small business leaders expect inflation to be a persistent challenge, despite their optimism about the economy. A large majority of CEOs and owners (71%) say high inflation remains their top concern in the year ahead.
Human Intelligence + Artificial Intelligence
Most small businesses are already using AI as a means to boost productivity and improve customer support, but not to cut jobs. A significant majority (80%) of small businesses say they are currently using AI, of whom 35% say they’re using it to improve productivity. Small businesses leaders said the top areas their company is using AI includes Customer Support (43%), Marketing (38%), and Research & Analysis (29%).
While AI tools are helping businesses get tasks done faster, owners and CEOs are still prioritizing human talent. Less than one-fifth (18%) said they use AI to reduce costs via lowering their headcount.
Heightened Awareness of Exposures, More Insurance Coverage
In the aftermath of the global pandemic and amidst an ever more complex corporate and regulatory landscape, small businesses are more conscious of their exposures. With the threat of potential legal pitfalls, more than a quarter (26%) of CEOs and business owners say they have significantly expanded their business insurance coverage over the last year.
Over one third (35%) of small business leaders say they’ve thought about looking for a new business insurance agent, signaling the urgency to enhance their risk posture.
The survey found almost two-thirds (63%) of CEOs and business owners hold Employment Liability Insurance (EPLI), making it the most commonly held policy. D&O is the second most common, with 52% of small business leaders saying they hold the policy.
For access to the full results from the 2023 Small Business Insights Report, visit the Counterpart site here.
Survey Method
Counterpart commissioned a survey of 306 small business owners and CEOs across the United States with a minimum of 25 and maximum of 499 employees in August 2023. Based on a confidence interval of 95%, the margin of error for 306 is +/- 5.6 percentage points. This means that all other things being equal, the identical survey repeated will have results within the margin of error 95 times out of 100.
About Counterpart
Counterpart pairs trusted insurance experts with AI driven underwriting and claims technology to enable small businesses to do more, with less risk. Its proprietary management and professional liability insurance products are complemented by a suite of tools and services that help its customers proactively reduce risk and grow with confidence. Counterpart’s Directors & Officers, Employment Practices, Fiduciary, Crime, and Miscellaneous Professional Liability insurance products are backed by Markel and Aspen Insurance. For more information, visit yourcounterpart.com.
