Intermedia Cloud Communications has released revealing new insights on how remote and hybrid work are impacting business operations, employee satisfaction and customer retention for SMBs.

The survey of more than 300 SMB owners and senior leaders, conducted for Intermedia by Sapio Research, reveals that while many companies are moving into hybrid work models, SMBs that offer employees greater workstyle flexibility are seeing significant benefits that can positively impact the bottom line — including higher customer retention rates. Studies, such as a recent report by the National Business Research Institute, have shown a direct correlation between engaged employees and satisfied customers, and providing employees with greater flexibility as to where they work enables them to be more engaged and responsive when customers need them.

"Many studies have shown a direct link between employee satisfaction and customer retention,” said Elka Popova, vice president and senior fellow, Frost & Sullivan. "A happy employee produces more positive customer interactions — they respond to inquiries quicker, they care more and they are more protective of the company’s reputation. Investing in your employees makes a lot of business sense."

Flexibility or Bust

Not only does workplace flexibility affect customer retention, but the importance of a remote/hybrid work option being offered within an organization was also found to be a critical factor in employee retention. According to the study, SMB leaders reported that the main reason given by their employees for leaving their positions over the past six to 12 months (45%) was a lack of flexibility with fully remote/hybrid environment options.

It would appear, however, that most SMBs are not yet ready to go completely remote, as nearly three-quarters (72%) of the business leaders surveyed indicated it is important that their employees live within commuting distance of an office.

The Satisfaction Surge

Since the beginning of the fully remote/hybrid work revolution triggered by the COVID-19 pandemic, 69% of the responding SMB leaders and owners believe remote and hybrid work have significantly improved their employees' job satisfaction. Employers report increased productivity as a result of the greater flexibility in where and how employees perform their jobs in remote and hybrid working environments.

This satisfaction is not limited to employees or business owners. Customer retention has risen since SMBs started offering fully remote/hybrid work environments, with nearly two-thirds of respondents (64%) reporting their customer retention has increased since reconfiguring their work environments. Respondents at companies that offered both remote and hybrid environments reported a higher customer retention increase (79%) than those that offered only remote (62%) or only hybrid (57%) work options.

"The workplace evolution has created its own set of unique challenges for SMBs looking to grow operations and maintain a competitive advantage in today’s market, balanced against expectations from employees for greater flexibility in the way they work,” said Scott Anderson, chief marketing officer, Intermedia. "As this research would appear to indicate, many business owners and decision makers who were once skeptical about productive work happening from wherever are now realizing the real benefits that offering workplace flexibility affords, including a marked increase in customer retention. Cloud communications solutions like the ones we deliver at Intermedia are built to enable customer care and employee collaboration from wherever work happens, be it the office, remote or a hybrid of the two. As the findings suggest, offering flexibility in how and where work happens should no longer be seen as a luxury, but instead as a strategy that helps deliver better business performance."

The evolution of whenever, wherever work has led to a multitude of benefits that business leaders hope to build on when future-proofing their small and medium-sized businesses. Leaders say the shift has increased their employees’ availability, productivity and focus — each by at least 59%.

"This report reinforces much of what we already know; remote and hybrid work aren’t some passing pandemic-era fads — they’re now part of the modern workplace architecture,” said Elizabeth Mye, senior vice president of human resources, Intermedia. "Their impact on employee and business-owner satisfaction isn't wholly unexpected, but the influence on customer retention is compelling. The results are pretty clear — while not without challenges, longer-term remote and hybrid options should be in the conversation for any SMB."

Access the full survey results here.