Businesses on the high street are showing resilience in the face of many economic obstacles

CLEVELAND-(BUSINESS WIRE)–CBIZ, Inc. (NYSE: CBZ), a leading provider of financial, insurance and advisory services, has released its Q1 2022 CBIZ Main Street Index, which tracks the pulse and assesses the outlook for small and medium-sized businesses. (SME). The findings reveal the theme of employer resilience in the face of persistently high inflation, a tight labor market and lingering supply chain challenges.

Sixty-four percent of respondents say inflation continues to be the biggest burden on their business, but owners are trying to mitigate the problem by passing on additional costs to customers and cutting current costs. Almost 70% of enterprises note that they take measures to increase prices, 20% increase them by 10% or more.

The survey, conducted March 22 through April 4, analyzes responses from more than 1,400 Main Street businesses with fewer than 100 employees in 27 industries across the United States*. The index assesses a range of current trends, including business sentiment, boom and bust staffing needs, and adapting to a changing workplace.

“SMBs face a triple threat in this economy,” said Kevin Nussbaum, vice president of new business development for CBIZ Inc. — Inflation remains near record highs, forcing many of these owners to pass costs on to their customers. The unemployment rate remains stubbornly low, making it a challenge for some industries, like hospitality, that are struggling to keep their workforce up to speed. Ongoing supply chain issues are also affecting certain sectors. Despite all these problems, business remains optimistic.”

The data was evaluated from an overall perspective, as well as based on company size, region and industry. An interactive infographic with the results is available on the CBIZ website. Key findings include:

  • Almost two out of three companies say that inflation is the biggest burden on their operations — 69% say they have or plan to raise prices to combat rising costs of goods and services. Thirty-seven percent are implementing cost-cutting or cost-control strategies to keep costs under control. Additionally, the survey found that 49% of companies will raise prices to increase or improve their business growth, up from 23% last quarter.
  • Companies continue to adapt to ‘The Great Retirement’ by adding staff but understaffing — Staff shortages continue to be a problem for the third quarter in a row, with 52% of respondents saying it remains a top concern. Over 42% say they are understaffed by at least 10%. On the other hand, the number of employees continued to show growth, ahead of the figures for the fourth quarter of 2021. While the Great Attrition presents challenges for small and medium-sized businesses, 45% indicated they are changing their workers’ compensation or health and financial benefits packages as an incentive for new candidates and current employees, while 39% have added independent contractors.
  • Almost half of companies are dealing with supply chain slowdowns — Forty-seven percent of companies see supply chain disruptions as a problem that negatively impacts their business, but are looking for ways to adapt. Forty-six percent are making changes to their operations, while 40% are investing in technology to improve efficiency.
  • Strong consumer demand continues to be a driving factor influencing the positive outlook for the business — Main Street businesses are holding steady with revenue and profit growth carried over from Q4, but continue to report strong quarter-on-quarter growth through 2021. A smaller number of companies indicates a decrease in revenue and profit. Three percent fewer companies reported a decline compared to the previous quarter and 8% fewer from the first quarter of 2021.
  • Two years later, the COVID-19 pandemic is less of a concern for small and medium-sized businesses — Sentiments surrounding the pandemic and its impact on business are beginning to change and no longer cause concern at the highest level among surveyed companies. Twenty-five percent of respondents say they are concerned about the impact of the COVID-19 recovery on their business, compared to 44% of companies surveyed in the fourth quarter of 2021.

*Note. Not all CBIZ Main Street Index respondents are CBIZ customers.

About CBIZ

CBIZ, Inc. is a leading provider of financial, insurance and consulting services to companies in the United States. Financial services include accounting, taxation, government health consulting, operations consulting, risk consulting and valuation services. Insurance services include employee benefits consulting, pension consulting, property and casualty insurance, payroll consulting, and human capital consulting. With more than 100 corporate offices in 32 states, CBIZ is one of the largest providers of accounting and insurance brokerage services in the United States. For more information, visit www.cbiz.com.

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