Once again, in Q4 2010 Winning Workplaces surveyed the hundreds of winners and finalists of our small workplace award programs we’ve conducted since 2003. We previously surveyed our honorees a year ago in Q4 2009; the results of that survey are detailed here.
The majority of our respondents in Q4 2010 were the CEO/President of their organization (77 percent). Thirteen percent were senior managers and 4 percent were mid-level managers. The remaining six percent serve in other capacities in their organization.
Ninety-two percent of respondents lead or work in firms with 500 or fewer employees; 7 percent have 501-1000 employees and 1 percent have more than 1000 employees.
Expected Changes to Revenue, Profitability Over Next 12 Months
What’s new this time around? In a word, optimism. Following the positive trend of recent small businesses studies by Constant Contact and Discover, 84 percent of our honored firms expect revenue growth over the next 12 months (9 percent expect a decrease while 7 percent expect no change). In terms of how this will affect profits, 81 percent expect increased profitability over the next 12 months (7 percent expect a decrease, though no respondents expect it to exceed 10 percent; the remaining 12 percent expect no change in profitability).
Continuing Impact of Credit Crisis
Perhaps because many of our honorees have taken steps to keep their cash flow strong and have said no to unfavorable rates for access to new credit, we see the optimism continuing when comes to their handling of the continuing credit crisis. Here’s where our honorees are vs. a year ago:
|Over the past year conditions for credit have…||Q4 2009||Q4 2010|
|Stayed the same or improved||67%||65%|
|Had no effect on our business||10%||24%|
While those reporting that conditions are unchanged or improved stayed about even over the past year, the number who say conditions have worsened dropped by more than half.
Actions Taken Responding to a Tough Economy
Since last year’s survey, we expanded the answer choices for our question asking what honorees have done to keep their businesses performing at the same level in a still-tough economy. Here’s how they answered:
|Introduced new products/services||70%|
|Created efficiencies through redesigned processes||68%|
|Refocused on core products/services||54%|
|Cut operating expenses*||51%|
|Eliminated unfilled positions||22%|
|Hired additional salespeople||19%|
|Laid off staff*||16%|
|Increased use of outsourcing||9%|
|Decreased use of outsourcing||4%|
In line with our prior-year survey results, our honorees favored actions addressing their products/services, process improvement and cutting operating expenses over layoffs and salary cuts.
The three actions above marked by an asterisk (*) are explored in greater detail below.
Cuts to Operating Expenses
Among the half of respondents that report cutting operating expenses, they cut them by an average of 13 percent. The main areas in which they made cuts include:
|Across the board||22%|
|Capital purchases including vehicles||7%|
Among the 16 percent of respondents that reported staff layoffs, on average they cut 19 percent of staff. These cuts break down as follows:
Among the 10 percent of respondents that reported salary cuts, the average cut was 9 percent, matching what we found a year ago. Cuts break down as follows:
|Across the board||30%|
|Salaried – non-management||20%|
Actions to Ensure Success in Next 12 Months
Our honorees are intentional when it comes to the actions they plan to take to ensure they maintain revenues and profitability. Learn from their plans, which include:
|Invest in training & staff development to ensure we’re ready for growth||68%|
|Add new products/services||65%|
|Ensure solid tracking and reporting tools in place to allow proactive management of the business||57%|
|Invest in marketplace/customer research to sell them what they want – not what we think they want – to exceed their expectations||41%|
|Revisit compensation plans to ensure employees properly incented to deliver best results||38%|
|Expand trade area to include new U.S. geographies||34%|
|Rehire and/or fill open positions||31%|
|Hire additional salespeople||28%|
|Expand trade area to include new international markets||22%|
|Ensure supply chain ready for growth||18%|
Because in good times our honorees understand and act on the premise that people are their greatest asset and are most responsible for moving the business forward, in tough times the majority – having eschewed layoffs in favor other actions, as addressed above – are mainly turning to internal and external staff development mechanisms to prep for the inevitable upturn in the economy.