Pandemic highlights value of tech and talent investment for business

Rhea-AI Summary

The COVID-19 pandemic has underscored the critical need for technology investments in small and middle-market businesses, according to a survey by CIT Group Inc. (NYSE: CIT). Most businesses adapted to remain open, but faced challenges with reduced operations. A significant majority of executives now view tech investments as essential for survival, with 61% of middle-market and 81% of small business leaders agreeing on its necessity. Plans for increased investments are evident, with 84% intending to invest equally or more in the coming year, highlighting a shift in business priorities.

Positive

• 89% of small businesses and 97% of middle market businesses managed to stay operational during the pandemic.
• 61% of middle market executives now strongly agree that technology investment is crucial, up from 47% in 2019.
• 76% of middle market executives believe technology investments would have improved pandemic resilience.
• 84% of small and middle market businesses plan to invest equally or more in technology over the next year.

Negative

• 47% of small businesses and 62% of middle market businesses operated with reduced capacity due to safety concerns.
• Only 15% of small businesses plan to invest less, indicating potential financial strain.

NEW YORK, Sept. 16, 2020 /PRNewswire/ -- For middle-market and small businesses, the COVID-19 pandemic is highlighting the vital importance of investing in new technology, facilitating remote work, and maintaining the tech-savvy workforce needed to make it all happen, according to a new survey conducted by The Harris Poll¹ for CIT Group Inc. (NYSE: CIT).

The survey found that most small and midsized businesses managed to stay open when the pandemic hit (89% small business [SB], 97% middle market [MM]).

But that often meant working in a limited capacity with reduced hours, offerings, or workforce (47% SB, 62% MM), as safety concerns and lockdowns are likely among the factors preventing normal operations.

Compared to a year ago, significantly more middle market businesses strongly agree that continuous technological investment is a business need (61% vs. 47% in 2019). That conviction is also strong in the small business community, where 81% agree technological investment is an ongoing business requirement, the survey found.

"The resiliency and flexibility that technology can deliver to midsized and small businesses has been proven convincingly by the COVID-19 outbreak," said David Harnisch, president of CIT's Commercial Finance division.

"These survey results further demonstrate that business leaders have taken that lesson to heart and are focused on making technology a fundamental part of their 'tomorrow thinking'," he added.

Tech investments – before and after

Most executives wish that they'd invested more in technology over the past 12 months (68% SB, 94% MM). In fact, more than 3 in 4 middle market executives (76%) believe investments in technology would have helped their company fare better during the pandemic. For small businesses, roughly half felt similarly (46%).

At this point, however, there's little question about how important technology will be in the business world going forward, with large majorities of small and midsized business executives saying tech is key to their survival (79% SB, 92% MM).

And they seem determined not to repeat the mistake of under-investing. Virtually all are planning to invest as much or more in their business over the next 12 months as compared to the past year (84% of SB and MM combined). However, only 15% of small businesses say they plan to invest less this coming year, which may be due to financial constraints resulting from the pandemic, the survey found.

"Small businesses don't always have the financial resources that larger enterprises often enjoy," said Ken Martin, managing director of CIT's Small Business Solutions group. "In cases where investments are imperative, borrowing or leasing may be the right solution to acquiring the technology needed to remain competitive."

Making it easier to work remotely

When it comes to tech upgrades, investments that make it easier for employees to work from outside the office are a clear priority. Over the next 12 months, about 7 in 10 middle market executives (71%) and nearly a third of small business leaders (31%) who plan to invest will spend on technology that facilitates remote work.

"Reliable remote work capability is essential for today's businesses, large or small," said Denise Menelly, CIT's executive vice president and head of Technology and Operations. "It's not just a matter of convenience. Businesses that empower employees to work remotely have a clear competitive advantage over those who don't."

Once these remote working capabilities are upgraded, they're likely to remain a common facet of many workplaces even after the pandemic. Approximately a quarter of small businesses that transitioned employees to working remotely to stay open during the pandemic expect (28%)—and want (25%)—this change to remain permanent after COVID-19 subsides, with about 40% of middle market executives that made the change expecting (43%) and wanting (42%) the same thing.

Among those who can operate with remote employees, about half of small business executives (53%) and more than three-quarters of middle market executives (76%) say their companies plan to allow employees to regularly work remotely on a permanent basis after the pandemic subsides.

More than half of middle market executives (53%) strongly agree that having the ability for their employees to work remotely would help them grow their company, compared to only 37% who said the same in 2019.

Valuing a tech-savvy workforce

These trends are putting a premium on a tech-savvy workforce, which is needed more than ever to leverage technology both to support customers and to collaborate with colleagues.

A majority of executives see retaining employees as critical to business survival (86% SB, 85% MM). While most believe their current workforce is tech-savvy enough to keep up with digital transformation (82% SB, 90% MM), businesses are substantially more likely than last year to say companies need to focus on hiring tech-savvy talent (79% SB in 2020 vs. 69% in 2019; 94% MM in 2020 vs. 83% in 2019).

The CIT-sponsored survey of leaders at U.S. middle-market and small businesses was designed to illuminate the intersection of technology and talent – two of the most important factors driving today's businesses. It is the second year that CIT has worked with The Harris Poll to sponsor the survey and release the findings.

About CIT
CIT is a leading national bank focused on empowering businesses and personal savers with the financial agility to navigate their goals. CIT Group Inc. (NYSE: CIT) is a financial holding company with over a century of experience and operates a principal bank subsidiary, CIT Bank, N.A. (Member FDIC, Equal Housing Lender). The company's commercial banking segment includes commercial financing, community association banking, middle market banking, equipment and vendor financing, factoring, railcar financing, treasury and payments services, and capital markets and asset management. CIT's consumer banking segment includes a national direct bank and regional branch network. Discover more at cit.com/about.

MEDIA RELATIONS:
John M. Moran	Donna Choi
212-461-5507	212-461-5731
john.moran@cit.com	donna.choi@cit.com

¹ ©2020 CIT Group Inc. All rights reserved. CIT and the CIT logo are registered trademarks of CIT Group Inc. The 2020 Technology and Talent Survey was conducted online within the United States by The Harris Poll on behalf of CIT from June 17 to June 29, 2020 among 304 executives at middle market companies (defined as companies with 100-9,999 employees) and 304 executives at small businesses (defined as companies with 1-99 employees). Data from the small business and middle market segments were weighted where necessary by employee size to bring them into line with their actual proportion in the population. For more on the survey methodology, see the survey white papers at cit.com/tech-and-talent-mm-2020 and cit.com/tech-and-talent-survey/small-business-2020.

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SOURCE CIT Group Inc.

FAQ

What does the CIT Group survey reveal about technology investments during the pandemic?

The survey indicates that technology investments are now viewed as essential by the majority of small and middle market businesses, with significant increases in perceived necessity since last year.

What percentage of small businesses managed to stay open during the COVID-19 pandemic according to CIT Group?

According to CIT Group, 89% of small businesses managed to remain open during the pandemic.

How many executives believe technology investments could have helped during the pandemic?

76% of middle market executives believe that technology investments would have allowed their companies to perform better during the pandemic.

What are the future plans for technology investment among small and middle market businesses as reported by CIT Group?

84% of businesses plan to invest as much or more in technology in the upcoming year compared to the past year.

What challenges did small businesses face operating during the pandemic according to the CIT survey?

The CIT survey found that 47% of small businesses operated with reduced capacity, including limited hours and workforce, due to safety concerns.