The majority of Americans—70%, in fact—believe that a recession is imminent. Small business owners are no exception. According to a new study of over 1,000 small business owners from freelance platform Fiverr, small business owners are battening down the hatches and preparing for rough economic waters, which includes hiring freezes and layoffs. Here are some of the report’s key findings:
- 85% of U.S. small businesses say they plan to implement hiring freezes during the economic downturn. Hybrid companies are the most likely to say they’ll implement hiring freezes: 88% are considering this, compared with 78% of companies that are fully remote.
- 78% of small businesses also plan to lay off employees. Once again, remote companies are less likely to lay off staff (74%) compared to in-person companies (87%), and hybrid (88%).
- 87% of small businesses have had to re-examine fixed costs, such as leases and insurance, versus variable costs, such as staffing and benefits, while 41% reported lower productivity among staff and 30% said staff are more likely to ask for raises or benefits. This indicates that companies are already feeling the effects of inflation.
- 43% of small business owners are planning to use freelancers to fill the gaps, and 80% said freelancers can help during economic downturns.
“Changes to headcount and working arrangements are unfortunately necessary during cost-cutting periods, and yet businesses need to ensure staff still feel supported and morale remains intact,” said Shany Malbin, general manager of Fiverr Business.