Middle Market Keen on Investing in People and Technology
Middle market businesses are investing in employee engagement and technology as they continue to navigate the pandemic
As middle market companies adapt to disruption caused by the pandemic and rapid technology shifts, they’re increasingly investing in technology and workforce capabilities, whether implementing a hybrid work environment or diversifying their talent pipelines. And they’re planning to continue those types of investments over the next 1 to 3 years, according to a recent survey conducted by Capital One and Morning Consult.
The survey asked 400 financial decision-makers from middle market companies about their investment plans for 19 strategic and emerging business trends. Here’s what it uncovered.
More companies plan employee experience investments than customer experience investments in the next 1 to 3 years
When asked where they plan to invest in the next 6 months:
- 94% of respondents reported they are planning investments in customer experience
- 92% reported data and data analytics
- 90% reported cybersecurity
- 89% reported they will invest in employee experience and wellness
But when they shared their planned investments over the next 1 to 3 years, employee experience and wellness along with data/data analytics were selected by the most respondents, with 94% reporting planned investments in these areas, followed by customer experience (91%), cloud migration (90%) and collaborative technologies (90%).
While the top 4 responses remained largely the same, there was a shift in the number of companies investing in areas like employee experience and wellness, quantum computing and building a talent pipeline through nonprofit and community programs:
- Employee experience and wellness (+5%): Over the next 6 months, 89% reported plans to invest in employee experience and wellness; that number grows to 94% over the next 1 to 3 years.
- Quantum computing (+5%): Over the next 6 months, 75% reported plans to invest in quantum computing; when asked about investments over the next 1 to 3 years, 80% said they plan to invest in quantum computing.
- Building a talent pipeline through nonprofit and community programs (+5%): Over the next 6 months, 82% shared they plan to invest in building their talent pipelines through nonprofit and community programs; within 1 to 3 years, that number shifted to 87%.
Among the top priority investments, companies plan to commit varying budget levels
Successful middle market enterprises have an appetite for investing in growth. To grow, they understand the importance of investing in technology and people. However, investment levels in critical areas tended to vary over the next 6 months and the next 1 to 3 years.
Investment plans through March 2022
Nearly one-in-five companies plan to invest over half a million dollars in the following areas:
- Data/data analytics: 20% are spending more than $500K.
- eCommerce: 19% are spending more than $500K.
- Customer experience: 19% are spending more than $500K.
- Quantum computing: 19% are spending more than $500K.
Investment plans for the next 1 to 3 years
More than a quarter of companies plan to invest over half a million dollars in the following areas:
- eCommerce: 28% plan to invest more than $500K.
- Supply chain/logistics: 28% plan to spend more than $500K.
- Data/data analytics: 27% plan to spend more than $500K.
- Cybersecurity: 27% plan to invest more than $500K.
- Collaborative technologies: 27% plan to spend more than $500K.
- Customer experience: 27% plan to spend more than $500K.
Twenty-six percent of companies also planned to invest more than $500K in artificial intelligence, employee experience and wellness, payment technologies, and environmental, social and governance initiatives.
Investing beyond the budget
To fully realize the value of these strategic investments, it’s critical to look beyond budget and assess the full scope of resources allotted. That means time, headcount, training efforts and change management techniques that will drive return on investment. It means building the right culture to adopt new initiatives and empowering employees to adapt. And it means having the proper mechanisms in place for measurement, whether that measurement is tied to operations, delivery, customer service or finance.
Survey Methodology
The Capital One survey was conducted by Morning Consult among 400 U.S. middle market financial decision-makers representing companies with total annual revenues of $20 million to $500 million. The survey was conducted from an online panel from September 1 – September 9, 2021. The margin of error is +/-5%.
For Informational Purposes Only
The information contained herein is shared for educational purposes only and it does not provide a comprehensive list of considerations or best practices. This information does not represent any opinion, guidance or recommendation, whether formal or informal, of Capital One, National Association, or any of its officers, directors, employees, advisors, attorneys, consultants, affiliates or subsidiaries (collectively, “Capital One”). Nothing contained herein shall give rise to, or be construed to give rise to, any obligations or liability whatsoever on the part of Capital One.
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