A new Facebook survey of small- and medium-sized businesses has found that, among those who have shut down amid the global covid-19 health crisis, only 45 per cent plan to rehire the same employees when they reopen.
Facebook’s State of Small Business Report, released Monday, was published as part of the company’s collaborative effort with the World Bank and the Organisation for Economic Co-operation and Development to amass data on the current business climate. To gather its data, Facebook surveyed roughly 86,000 employees, owners, and managers of small- and medium-sized U.S. businesses, and its findings were not especially heartening. 31 per cent of those businesses in the U.S. have recently shut down amid the global covid-19 health crisis
According to the survey, 31 per cent of these businesses have shut down in the past three months, while 52 per cent of self-employed individuals said they have shut down what Facebook calls their “personal businesses.” While 45 per cent of small- and medium- businesses’ leadership said they would rehire their former employees, that number dipped to just 32 per cent for personal businesses. The survey found that 19 per cent of business owners were still paying wages to employees while their businesses are closed, while a mere 9 per cent of personally run businesses are doing the same.
By Facebook’s estimate, 43 per cent of hotels, cafes, and restaurants have reported ceasing operations in recent months, and 41 per cent of wellness-field businesses like hairdressers and fitness services reporting they’ve closed their doors. When Facebook asked businesses if they would rehire their employees upon reopening, the results varied across individual sectors. For example, 63 per cent of hotels and eateries said they’d rehire staff, but only 27 per cent of business owners and managers in agriculture, forestry, and mining said they would bring the same employees back on.
Right now, the novel coronavirus pandemic has created economic uncertainty unlike anything that’s been seen in recent history. As of late April, the unemployment rate had skyrocketed to nearly 15 per cent, the highest it’s been since the Great Depression. And it’s predicted to get worse before it gets better: Federal Reserve Chair Jerome Powell said during a recent 60 Minutes interview that it’s possible the figure could hike to somewhere between 20 to 25 per cent.
Facebook Chief Operating Officer Sheryl Sandberg said in a statement that the report’s findings underscore the dire economic situation facing small businesses, particularly those run by women.
“This report is the first of an ongoing series tracking the situation facing small businesses across the country,” Sandberg said. “These were planned before the virus struck, when we had anticipated this first report would paint a much brighter picture. Instead, it brings home the scale of the crisis our economy is facing and helps point us to where help is needed most.”