United States

RSM Survey Reveals How the Middle Market is Returning to Work

Midsize businesses are optimistic about returning to work but when and how they’ll return varies significantly between larger and smaller middle market firms



RSM US LLP (RSM) – the nation’s leading provider of audit, tax and consulting services to the middle market – today announced results from its RSM US Middle Market Business Index (MMBI) Return to Work Special Report. The report found an overall optimism from midsize businesses about returning to work but exactly how they will reopen depends on the company’s size.

While increasing coronavirus cases during the third quarter of 2020 forced many local economies in the U.S. to pull back from reopening activities, middle market businesses remain enthusiastic about reopening in the next year. Across-the-board, respondents agreed taking pandemic-related safety precautions and seeing a decline in coronavirus case counts were necessary factors for reopening their workplaces. However, attitudes and approaches toward remote work, when to reopen, necessary return-to-work safety measures and the costs of reopening varied significantly between the upper middle market – businesses with annual revenues of $50 million to $1 billion – and the lower middle market – those with revenues of $10 million to $50 million.

“These are unprecedented times for organizations across the entire U.S. economy,” said RSM US Chief Economist Joseph Brusuelas. “Each industry will have to work within its unique parameters to get their employees back to work. But we are heartened by the positive response to reopening displayed by the majority of midsize firms in the survey cohort as it bodes well for their continued success.”

Number of Remote Employees and Reopening Plans Varies by Company Size

Employees at larger companies with more sophisticated communications structures had an easier time transitioning to remote work. According to the report, 43% of respondents at upper middle market companies reported having 20%-30% of their employees working remotely. However, just 14% of lower middle market businesses reported having remote employees, signaling they may have an easier time returning to work. A significantly higher percentage of lower middle market companies (24%) reported that none of their employees worked remotely while only 5% of upper middle market businesses reported the same.

For almost all middle market executives, employee attitudes towards workplace safety were significant considerations for determining when to reopen. Nearly every respondent (98%) indicated employee readiness was a consideration in reopening plans, with 40% indicating employee attitudes were critically important. Employers have taken this consideration seriously as 81% of respondents who reported their companies plan to reopen within the next 12 months say they surveyed their workers – formally or informally – about their readiness to return. Those surveys revealed a significant majority (69%) of employees are ready to come back immediately.

Middle market executives did offer differing views around when their organizations would reopen based on the scope of their company’s overall footprint. A little more than half of respondents at businesses with multiple locations said they planned to reopen all workplaces within the next year. Of that group, 29% said they would reopen most locations while only 7% reported plans to open just some. Forty-five percent of respondents with just a single location, typically those in the lower middle market category, reported they had already reopened or planned to reopen operations and, of that group, 46% indicated they had been deemed essential and never closed.

New Business Operations Costs Also Reveal Size Disparities

A major point of difference between upper and lower middle market companies was the ability to pass along the costs associated with reconfiguring business operations to reopen and keep the workplace safe. Thirty-one percent of executives reported they could pass the bulk of their reconfiguration costs onto clients or customers. However, 47% of that group were from upper middle market companies while just 14% of executives at lower middle market companies reported the same. Further, a significant majority (61%) of lower middle market companies indicated they couldn’t hand off any of the reconfiguration costs.

Differences in technological investments also highlighted disparities between upper and lower middle market companies. According to the report, upper middle market companies were more likely to rely on technology to communicate return-to-work guidance to employees. Sixty-six percent of those organizations said they used virtual meeting platforms compared to 60% of their lower middle market counterparts. Additionally, 58% of upper middle market companies leveraged a company intranet or web-based platforms while only 37% of lower middle market companies reported the same. There were also disparities between upper and lower middle market organizations when it came to the use of productivity platforms (53% vs. 38%) and training videos (47% vs. 31%).

Keeping the Workpace Safe is Critical Across-the-Board

Ensuring the safety of the workplace is paramount to middle market businesses. Eighty-six percent of respondents reported that seeing a two-week decline in the number of confirmed COVID-19 cases in their workplace location and surrounding area was at least a somewhat important consideration before reopening. Additionally, 83% of executives indicated ready access to COVID-19 testing was at least somewhat important while a majority (65%) reported they provided their workers with personal protective equipment (PPE).

Middle market executives also reported their organizations evaluated several considerations to ensure the health of their employees including local government guidance, data from the Centers for Disease Control and Prevention and regional health system capacity.

Ensuring social distancing at work was another critical consideration and the ten most popular steps middle market companies planned to take to encourage the practice include:

  • Limiting the number of people together in groups (62%)
  • Limiting the number of employees and visitors in the workplace (56%)
  • Prohibiting nonessential vendors and deliveries from entering the workplace (54%)
  • Prohibiting handshaking (53%)
  • Establishing minimum spacing between workstations (52%)
  • Offering continued remote work as an option (51%)
  • Closing or limiting access to common areas (50%)
  • Establishing physical barriers between workstations (44%)
  • Providing visual markers on walls or floors to establish distancing (43%)
  • Rotating or limiting the days that individual employees can be physically present (35%)

To stay informed with the latest insights, ideas and countermeasures to minimize the outbreak’s negative effects as well as prepare for future emergency events, visit RSM’s COVID-19 Resource Center. Please watch for our second report on the middle market’s responses to pandemic challenges, due to publish early next year. We will take a deeper diver into the operational approaches of these businesses, including their tactical shifts regarding products and services.  

The MMBI Return to Work Special Report data was gathered between July 8 and July 23, 2020.

About the RSM US Middle Market Business Index
RSM US LLP and the U.S. Chamber of Commerce have partnered to present the RSM US Middle Market Business Index (MMBI). It is based on research of middle market firms conducted by Harris Poll, which began in the first quarter of 2015. The survey is conducted four times a year, in the first month of each quarter: January, April, July and October. The survey panel consists of 700 middle market executives and is designed to accurately reflect conditions in the middle market.

Built in collaboration with Moody’s Analytics, the MMBI is borne out of the subset of questions in the survey that ask respondents to report the change in a variety of indicators. Respondents are asked a total of 20 questions patterned after those in other qualitative business surveys, such as those from the Institute of Supply Management and National Federation of Independent Businesses.

The 20 questions relate to changes in various measures of their business, such as revenues, profits, capital expenditures, hiring, employee compensation, prices paid, prices received and inventories. There are also questions that pertain to the economy and outlook, as well as to credit availability and borrowing. For 10 of the questions, respondents are asked to report the change from the previous quarter; for the other 10 they are asked to state the likely direction of these same indicators six months ahead.

The responses to each question are reported as diffusion indexes. The MMBI is a composite index computed as an equal weighted sum of the diffusion indexes for 10 survey questions plus 100 to keep the MMBI from becoming negative. A reading above 100 for the MMBI indicates that the middle market is generally expanding; below 100 indicates that it is generally contracting. The distance from 100 is indicative of the strength of the expansion or contraction.

About The U.S. Chamber of Commerce
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. For more information, visit uschamber.com.

The U.S. Chamber of Commerce is committed to helping American businesses respond to the coronavirus so they can support their employees, customers, and communities. Our members and the state and local chambers, who are on the front lines of this pandemic, need us now more than ever to help them through this significant disruption. We will continue working every day to help our country’s people, businesses, and economy weather this storm and emerge stronger—just as we have at other challenging times in our nation’s history. Visit uschamber.com/Coronavirus for more information.

RSM’s purpose is to deliver the power of being understood to our clients, colleagues and communities through world-class audit, tax and consulting services focused on middle market businesses. The clients we serve are the engine of global commerce and economic growth, and we are focused on developing leading professionals and services to meet their evolving needs in today’s ever-changing business environment.

RSM US LLP is the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with 48,000 people across 120 countries. For more information, visit rsmus.com, like us on Facebook, follow us on Twitter and/or connect with us on LinkedIn.