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Small Business Optimism on the Rise; Employee Happiness Declines

The Q3 MetLife and U.S. Chamber of Commerce Small Business Index shows that small business owners’ confidence has increased, with 66% saying their business is in good health and 71% expecting revenue to increase next year. However, while they are optimistic about their own companies, they have less optimism about the overall economy. Inflation remains a major concern for small business owners, with wage inflation being a particular challenge in Q3.

That said, according to a survey by BambooHR, employee happiness in 2023 has reached an all-time low, with a 6% decrease since the beginning of 2020. The decline in happiness has been particularly significant in 2023, with a 9% drop in employee Net Promoter Scores. The data reflects a trend of decreasing job satisfaction in the US, as a recent Gallup survey shows. Happiness levels vary by industry, with the construction industry reporting the highest levels of happiness and the tech sector experiencing a rapid decline. Financial challenges and unpopular return-to-office mandates may contribute to decreased happiness.

Why do we care?

The data on the economy continues to be solid, and business owners are feeling it.   Ideally, this should put them in a positive mindset and start driving that cycle of investment and growth. Business owners, imbued with a positive outlook, could be gearing up for investment, innovation, and expansion.

Employees, on the other hand, are a lot less so.   This will cause both a challenge for providers themselves and downstream customers.    I’m a bit of a broken record on this point. Still, I believe there’s an opportunity to help organizations build effective hybrid work environments based on business outcomes and not arbitrarily counting days in the office.   And it sure seems lucrative.