Despite continued inflation, most small businesses remain optimistic about their companies. (Credit: somchai20162516/Adobe Stock)
The data shows that more than three in five small businesses and 51 percent of mid-sized businesses rate the economy as “poor” or “fair,” while 51 percent of small businesses and 73 percent of mid-sized businesses rate their business as “good” or “very good.”
“Business owners are more optimistic the closer they are to their specific geographies, industries and operations,” Christina Tarkowski, senior vice president and head of midsize commercial lines at Nationwide, told Propertycasualty360.com. “This optimism ultimately coincides with economic indicators pointing to a resilient economy, but it also reflects the ongoing challenges of rising interest rates, materials and labor costs.”
She added that it's clear business owners are facing challenges, “but they are accepting these challenges and proactively taking steps to improve the strength and resilience of their businesses. I think this preparation is one of the reasons business owners are optimistic about the state of their businesses, as most feel prepared to weather major disruptions or expand their operations in the future.”
According to the survey, although small and medium-sized enterprises are optimistic about their businesses, they face a series of internal challenges including employee benefits, operational optimization and expenses.
“Health insurance and optional benefits like pet insurance certainly play a role in attracting and retaining top talent,” Tarkowski said.
“When it comes to property insurance, employers who report rising wages for their employees should be aware of the impact on workers' compensation premiums, which will increase as wages rise,” she added. “As employers face such internal and external pressures, it's not surprising they are looking to optimize costs. Many view insurance as a place to save, while agents and insurers can help ensure employers aren't sacrificing long-term protection for short-term savings.”
According to the survey, 34% of small businesses and 39% of mid-sized businesses said their employees want better compensation, while 25% of small businesses and 40% of large businesses said their employees also want better benefits.
Meanwhile, the survey found that 83% of small market businesses and 77% of mid-market businesses have reviewed their commercial insurance policies online or through an agent in the past six months, and more than a third of mid-market owners have either canceled a policy or reduced coverage limits during that time period.
Tarkowski also pointed to generative AI as another evolving need and challenge facing workers.
“It is important for companies to have policies in place governing the use of ChatGPT and other AI tools to ensure the security of business data and processes,” she said. “For workers, while there are benefits such as increased efficiency, there may also be drawbacks, with 43% concerned about the impact of AI on their job stability.”
While most businesses are investing in AI, the survey showed that mid-sized businesses are more likely to invest now.
Data shows that only 27% of small businesses are investing in AI, while 63% of mid-sized businesses are putting money into the technology.
