Many SMBs have restricted access to data analytics tools, keeping them from the robust data that larger companies are able to utilize. In many cases, this data can be the secret to marketing, recruiting, and development strategies. Here’s how your small businesses can catch up.
Small and Medium Businesses (SMBs) drive the US economy by contributing close to 50 percent of the overall $19 trillion. But the importance of SMBs goes beyond just the economic contribution; they have also contributed to growth and vitality in socioeconomic metrics by creating jobs and further opportunities for women and minorities to achieve necessary financial success and independence. However, many SMBs have restricted access to data analytics tools, keeping them from the robust data that larger companies are able to utilize.
Why do small businesses fail?
According to the U.S. Small Business Administration (SBA), there are approximately 28 million businesses in the U.S. Together they create 64% of the total jobs and pay 44% of the total US private payroll.
But even after the immense contribution to the economy and society, small businesses are more prone to failures. The Bureau of Labor Statistics 2016 reported that in 2013 there were 860,000 new businesses alongside 788,000 closures. And Statistics say that ⅓ of the businesses fail in the first two years and only 50% survive in the first 5 years.
A few of the reasons for SMB failure are the operational overhead and the time taken to solve the tactical issues. A problem well-understood by Zenefits, since removing operational overhead for the underserved SMBs was the basis on which it was founded. While we are focused on solving these issues efficiently and innovatively, we also know that our customers need more to sustain and scale.
Technology to solve inherited problems
Small businesses are not just competing with large businesses in their market segment, but inheriting what were traditionally the problems of large businesses as well. While the large businesses are moving forward by solving those problems of hiring, engagement, and retention thought utilizing data, the small businesses are still looking for a cost-efficient way to collect data in a structured way to solve their problems.
In a recent survey by IDC, the results show that 50% of small firms and 66% of large firms are paying more attention to the adoption of technology to transform their business. More importantly, 26% of North America’s SMB are planning to acquire data analytics software (Advanced Analytics or Business Intelligence) for the first time. This software is expected to help businesses deliver sustainable value by institutionalizing data-driven insights through a method of leveraging data, or though data analytics tools. This is a positive step we’ll see more SMBs taking in the next 12 months.
Data Analytics Tools: the need of the hour
In the past, data analytics tools was a privilege exclusive to large companies that maintained teams of IT specialists and data scientists, and to whom cost was no object. Also, large companies had expansive pools of their own organized data available to them, which was used for driving insights. However, in the last decade the technology has developed rapidly and with it, software like Zenefits. They have not only become lightweight and powerful but they have transformed SMBs’ data to be utilized in a more efficient way. In this new age, software doesn’t just solve the day-to-day problems of businesses, but they also store large volumes of data which would not normally be available for SMBs.
A value proposition that makes every client of Zenefits a data-rich company and also provides a level playing field for them to compete against the well-established businesses.
How do small and midsize businesses become more data-driven?
To be a data-driven company, SMBs need three key ingredients.
- Purpose & Leadership – Does the process of Data Analytics support the company’s strategic objective overall? And to what extent is the leadership passionate about Analytics?
- Data – How usable is the data?
- Analytics skill – What is the data science expertise in the organization?
While Zenefits can take care of the former two aspects for its customers, the onus is with the company to drive the most important aspect, which is to bring in the sense of purpose and passion for Analytics. By focusing on this, companies can move from an analytics impaired organization to a fully functional data-driven organization.
Eventually, with the rich HR data, managers can solve problems in the areas of hiring, employee management, and retention. With these data analytics tools, these insights will not be for the privileged few only, but a tool to help all businesses start, build, and grow more efficiently.
Someone driven by intuition is human, but when they are armored with data analytics tools, they can be Ironman. To know more about our reporting feature, and how our tools can be more useful to your small business, schedule a demo today!