Insights and Resources
Company size: A major factor in middle market back to work strategies
INSIGHT ARTICLE |
Authored by RSM US LLP
As the country continues a choppy reopening in the midst of the COVID-19 pandemic, middle market companies are developing and implementing strategies to safely return to the workplace. RSM US Middle Market Business Index data from the third quarter shows some significant differences in the back-to-work approaches between lower middle market companies and their upper middle market counterparts.
Smaller middle market companies lagged behind larger midsize businesses in transitioning people to remote work. In fact, 24% of companies polled with between $10 million-$50 million in revenue had no employees working remotely, compared to less than 5% of respondents with between $50 million-$1 billion in revenue. While in some instances this may have hindered the productivity of smaller companies during lockdown periods, the cohort may have the leg up in returning to the workplace.
“Getting back into the office creates a lot of issues for companies, particularly around HR,” said RSM Principal Jay Schulman. “Smaller companies can adapt and accommodate these issues with more agility than larger companies.”
While companies are taking several steps to reintroduce employees to the workplace, a major issue remains out of their control. “Schools opening remotely remains the biggest pain point in the middle market, with many parents unable to go back to an office because their kids are attending school from home,” said Schulman.
Whenever employees can return to work, companies in the lower middle market appear to be taking many steps to maintain social distancing in the workplace. MMBI data shows that smaller companies are much more likely to limit group gatherings, prohibit nonessential vendors and deliveries, prohibit handshaking, establish minimum spacing and offer continued remote working as an option.
Implementing strategies to ensure the safety of the workplace comes at a cost that was impossible to account for in a yearly budget. However, survey data shows that larger middle market companies are more likely to avoid incurring those costs than smaller companies.
Nearly half (47%) of larger middle market respondents plan to pass most of these costs on to clients or customers while 13% will pass on all costs. In stark contrast, only 14% of smaller middle market organizations will pass on most safety-related costs, while only 6% will pass on all of them.
With the pandemic, the entire supply chain is being disrupted, and the specific allocation of increased costs has yet to be universally determined.
“The workplace requirements are continuing to change and companies are unsure where to make long-term investments to get their employees back into the office,” commented Schulman. “Trying to figure out whether these costs can be passed on to customers has yet to be fully vetted.”
These are unprecedented times for organizations in all industries. Each industry will have to work within their unique parameters to get their employees back to work.
Call us at +1 213.873.1700, email us at firstname.lastname@example.org or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by RSM US LLP and originally appeared on 2020-09-21.
2020 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.
Subscribe to receive important updates from our Insights and Resources.