Research
Snapshot: Trends in Small and Midsize Professional Services Businesses
We dove into the data to learn how professional services are thriving through uncertain times.
As the global economy navigated an eventful year marked by both the reopening of many physical workplaces and a continued embrace of the work-from-anywhere model, small and midsize businesses (SMBs) in the professional services industry held steady — and then some. According to the fifth edition of our “Small and Medium Business Trends Report,” almost half (47%) of businesses we surveyed across the industry include Management and Business Services said their revenue grew between February and August 2021. Only 27% of professional services businesses reported a decline in revenue, which is lower than the average across other industries (33%).
On the whole, professional services SMBs needed less outside help, faced fewer challenges, and generally didn’t make as many changes as small businesses in other industries. And when it comes to changes they did make during 2021, they feel optimistic: 80% of professional services businesses said that shifts they made in business operations will benefit them long term.
We took a deeper look into the data from our fifth edition of the “Small and Medium Business Trends Report” to learn what professional services businesses are doing to thrive through still-uncertain times.
On the whole, professional services SMBs needed less outside help, faced fewer challenges, and generally didn’t make as many changes as small businesses in other industries. And when it comes to changes they did make during 2021, they feel optimistic: 80% of professional services businesses said that shifts they made in business operations will benefit them long term.
We took a deeper look into the data from our fifth edition of the “Small and Medium Business Trends Report” to learn what professional services businesses are doing to thrive through still-uncertain times.
Trend #1: Professional services businesses have remained steady through a volatile year.
Compared to 2020, 2021 was a steadier year, but still had its fair share of uncertainty. That said, professional services SMBs thrived more than most while facing both new and continued challenges. Though 91% of professional services businesses said they faced challenges this past year, almost half (47%) also reported growth in net revenue. Just as significant, only 27% saw revenue decline. That’s lower than the global average (33%). Steady revenue coincided with fewer layoffs than average (7% versus 13%), and better benefits for existing employees. More than seven in 10 (72%) of professional services SMBs reported no change in employee benefits. That’s notably higher than the 56% average response rate.
Seventy-two percent of professional services SMBs reported no change in employee benefits.
Trend #2: Workers in professional services expect flexibility, and employers have so far been able to accommodate them.
Last year, the pandemic forced the acceleration of many trends. High on the list was the move toward more remote and hybrid working, coupled with employers offering workers more flexible schedules. This trend continued to grow across many industries during 2021, even as some in-person offices and workspaces reopened. Almost half (48%) of professional services SMBs offered flexible working arrangements during the pandemic, as compared to the 42% in other industries. Workers in this sector see the trend continuing, as 57% of professional services SMBs said their employees expect flexible working arrangements going forward. Even more (59%) said their employees expect increased remote work options, which is a significant increase over other industries (41%).
How are businesses addressing the demand for flexibility?
What do employees expect?
Trend #3: Professional services SMBs were prepared to hold steady — yet feel optimistic about changes made last year.
More than in any other industry we surveyed, SMBs in the professional services sector reported not having relied upon outside support to get through the past year. Only 36% of these businesses said financial support from their community was vital to their survival, which is much lower than the 48% characterizing other industries.
At the same time, professional services businesses reported holding steady on their technology investments. That steadiness is perhaps attributable to SMBs in this sector already using key business technologies at a higher rate than their counterparts in other industries. Specifically, more than one-third of professional services businesses said they’re long-term users of email marketing (38%), project or task collaboration solutions (37%), and e-commerce (33%). And just under one-fourth (24%) are long-term users of a customer relationship management (CRM) solution.
That said, increasing business agility was an area where professional services businesses invested at a higher than average clip (65% versus 58%). Small business owners in this sector are optimistic about the changes they made last year, with 80% saying shifts they made to business operations (for example, digitization, allowing remote work) will pay off in the long term.
At the same time, professional services businesses reported holding steady on their technology investments. That steadiness is perhaps attributable to SMBs in this sector already using key business technologies at a higher rate than their counterparts in other industries. Specifically, more than one-third of professional services businesses said they’re long-term users of email marketing (38%), project or task collaboration solutions (37%), and e-commerce (33%). And just under one-fourth (24%) are long-term users of a customer relationship management (CRM) solution.
That said, increasing business agility was an area where professional services businesses invested at a higher than average clip (65% versus 58%). Small business owners in this sector are optimistic about the changes they made last year, with 80% saying shifts they made to business operations (for example, digitization, allowing remote work) will pay off in the long term.
Eighty percent of professional services SMBs say shifts they’ve made to their business will benefit them long term.
Dive deeper into trends across SMBs from more industries by downloading the “Small and Medium Business Trends Report".
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