Several interesting pieces of research were published this week. Research news from last week included a report from Tipalti that discovered that a lack of automation is strangling sustainable growth. Other research reports last week included findings from Experian, Intuit, Jitterbit, Jobber, NTT, Procore and SD Worx. Firstly ADP provided another US employment report.
ADP
ADP published its May ADP National Employment Report. During May, 278,000 jobs were added, powered by leisure and hospitality, natural resources, and construction. Growth was not uniform, though, with manufacturing and finance losing jobs.
Nela Richardson, Chief Economist, ADP, commented, “This is the second month we’ve seen a full percentage point decline in pay growth for job changers. Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring.”
The other notable statistic is that while the number of small (up 235,000) and medium (up 140,000) sized businesses grew, larger firms reduced headcount by 106,000. Pay also increased during the month, rising 12.1%, though this was a drop of 1% from April. For those staying in their role, rises were only 6.5% in May.
Experian
Experian published the State of the Automotive Finance Market Report: Q1 2023. It found that vehicle shoppers have opted to reduce loan periods to counter rising interest rates. The average loan term for a new vehicle for near-prime, prime and super-prime consumers decreased by as much as one month. The average interest rate for a new vehicle reached 6.58% in Q1 2023, up from 4.10% the previous year.
Melinda Zabritski, Experian’s Senior Director of Automotive Financial Solutions, commented, “Oftentimes when consumers shop for a vehicle the main priority is securing a low monthly payment, but it’s also important to assess the total cost of the loan, particularly amid rising interest rates and vehicle prices.
“While shorter term loans are usually accompanied by lower interest rates, right now OEMs seem to be offering additional incentives on shorter term loans, which is driving much of the growth in the 48-month segment.”
Another shift is that prime and super prime consumers are returning to used vehicles. Prime consumers made up 42.41% of used vehicle financing during the quarter, up from 40.97% the previous year, while the percentage of super prime consumers increased from 11.43% to 13.60% over the same period.
Zabritski added, “The industry continues to keep a watchful eye on some of the inventory challenges and rising vehicle prices, as it’s impacted consumer purchasing behavior. We’re seeing consumers bring more cash and trade-in value to the transaction in hopes of minimizing the amount of interest they’d have to pay on their loans. Additionally, with the combination of fewer new vehicles on dealership lots and high prices, in-market consumers are choosing used vehicles as another way to control vehicle costs.”
Intuit
Intuit has published its first annual Supplier Diversity Economic Impact Report. Through a concerted effort to proactively source products and services from small and diverse suppliers, Intuit is achieving impactful change for minority and women-owned businesses at scale.
During Intuit’s fiscal year 2022, the company spent $312 million with 550 US-based diverse and small businesses, an increase of $24 million year-over-year. Intuit’s focus on creating new opportunities for diverse small businesses is aimed at reducing economic disparities in underserved communities in the US, by supporting new jobs and opportunities for small businesses to scale and grow their businesses in the communities in which they operate.
Emma Chontos, Chief Procurement Officer at Intuit, commented, “We are proud to highlight that for every $1 we spend with diverse small businesses, we create $1.96 of economic impact. Our supplier diversity program is far more than just a business strategy, it’s an opportunity to drive meaningful change in local communities and is a key component of our mission to power prosperity.”
Intuit’s spending with diverse and small business suppliers generates economic activity in its supply chain and communities. In total, the program generated $613 million in total production. Key findings also included that the program supported more than 4,000 jobs across Intuit’s supply chain and in the communities where they operate, generating $261 million in total wages for the economy. Intuit’s Prosperity Hub Program also includes a subset of these jobs.
Jitterbit
Jitterbit published the results of its “2023 State of Customer Experience Automation: Eliminate Application Integration Challenges to Elevate Customer Experiences” survey. The report examines organizational priorities, challenges and expected benefits from automating the customer experience (CX) process, including which customer-facing functions and use cases are prioritized for automation.
While IT has the most automated business processes, CX is second and is also in the top five functions that firms are trying to further automate. The integration and automation of the marketing function are the top priority. The key challenges of achieving this automation are Application proliferation, IT resource constraints and manual integration. Organisations are looking to invest in automating marketing in the next 12 months.
Ron Wastal, Senior Vice President of Global Business Development, channel and alliances at Jitterbit, commented, “Our survey reveals that customer experience is a vital differentiating factor in today’s market. While organizations have made progress in optimizing CX, there is still a need to automate customer-facing workflows and address integration challenges. By integrating systems across the ‘lead to loyalty’ customer lifecycle, organizations can provide a consistent and exceptional experience, ultimately standing out from the competition.”
Jobber
Jobber published the Home Service Economic Report: 2023 Q1 edition. Based on responses from over 200,000 residential cleaners, landscapers, HVAC technicians, electricians, plumbers, and more, who use Jobber, it has some telling insights.
- While home maintenance spending remains stable regardless of the economy, home improvement spending shows higher growth but with more volatility.
- During economic slowdowns, discretionary spending slows, while replacement spending is more resilient in minor and major recessions.
- Median revenue growth is slowing but increased by approximately 3% in March relative to last year, which was a historically high growth year.
- On a two-year compound annual growth rate (CAGR), median revenue grew between 10-20% from Q1 2021 to 2023, which is quite healthy.
- The Green segment, which includes lawn care, landscaping, and other related outdoor services, experienced Q1 revenue growth of around 5-10%, which bodes well as it enters the busy summer season.
- Median revenue growth stayed positive for the Cleaning segment, despite declining new work scheduled in February and March after a positive January.
- Contracting, which includes electrical, handiwork, HVAC, plumbing, and other non-construction services, leveraged increased pricing power to generate year-over-year revenue growth of 12% in January before flattening in February and March.
- Construction businesses grew revenues in the first quarter year-over-year, despite a decrease in new work scheduled.
Abheek Dhawan, VP of Business Operations at Jobber, commented, “While we anticipate home maintenance spending to remain steady throughout the remainder of this year, home improvement spending may experience more volatility.
“Despite fluctuating demand, Home Service businesses are adapting to the shifting macroeconomic environment by leveraging increased pricing power in line with inflation to maintain revenue growth. Based on the historical performance during past recessions, we predict that the future for the category will remain positive regardless of economic uncertainties.”
NTT
NTT Ltd launched its Edge Advantage Report. Based on 600 enterprises, the report looked at how Edge delivers a competitive advantage but found that many have challenges.
- 88% cite 5G as an important enabler; those combining private 5G and Edge report the highest benefits
- 93% consider Edge a competitive advantage
The wider network is a challenge, with 40% planning edge deployments acknowledging they need to improve core infrastructure. 60% of those that have already deployed Edge have already done so.
Shahid Ahmed, EVP of New Ventures & Innovation at NTT Ltd, commented, “The growing need for faster processing and a distributed digital architecture is creating increased pressure on networks and infrastructure capabilities, driving both accelerated adoption of private 5G and Edge.
“Achieving the edge advantage will require end-to-end solutions with holistic management and uncompromising accountability. Only through utilizing these solutions can enterprises gain instant access to data, where it is generated or collected, with near zero latency, and harness it to drive powerful business outcomes.”
The report also dives into different sectors, looking at the reasons for deploying edge solutions. In manufacturing, the top four reasons are:
- Increasing employee safety, experience, and efficiency (79%)
- Streamlining/digitizing business processes (76%)
- Improving customer experience/anticipating customer needs (74%)
- Increase the use of data insights for decision-making (72%)
Procore
Procore released its annual construction industry benchmark reports ‘How We Build Now: Technology Trends Shaping and Shifting Construction – Southeast Asia 2023’ and How We Build Now – Technology and Industry Trends Connecting ANZ Construction in 2023.
The reports reveal insights into the construction industry’s overall sentiment, current challenges and opportunities for businesses, how businesses manage risks to protect their bottom line, and the digital maturity and adoption of construction technologies. The Asia report covers responses from Singapore, Malaysia, and the Philippines.
In Asia, construction professionals are increasingly aware of the importance of data and technology. However, adoption is poor.
- 99% feel that better data management can bring benefits to their businesses
- More efficient data management could save 22% of total project spend
- Just 6% of companies surveyed in Southeast Asia have laid the foundation for a data strategy
Tom Karemacher, Head of Region, Asia Pacific, Procore, commented, “It is clear from our research that while construction professionals in the region have a strong understanding that data and analytical insights can help drive better business outcomes and protect their businesses, many struggle with developing clear data strategies.
“While software vendors undoubtedly play a critical role in assisting construction businesses in this transformative journey, more can be done. Software vendors will need to clearly demonstrate the returns on investment, thereby justifying the indispensability of construction technology and data management. This will help drive the adoption of innovative solutions within construction that unlocks unparalleled value for the industry.”
ANZ are further ahead on data strategy. Still, half of ANZ construction businesses plan on designing a data strategy in the next 12 months.
Karemacher concluded, “An interesting outcome of this research highlighted one central consideration. The construction sector will continue to have a fundamental problem with how it operates unless it capitalises on the opportunity to digitise its processes and business – effectively stopping the ripple effect of not knowing what is happening in real-time. The costs to industry are now too significant for technology solutions and their benefits to be ignored.”
SD Worx
SD Worx surveyed 4,833 employers and 16,011 employees in sixteen European countries, including the UK, France, Germany, Italy and Belgium, to fully understand emerging workplace attitudes and expectations regarding HR technology. 68% of British and Swiss companies are investing in digital HR solutions. The average for Europe was 60%. Despite this, 37% of employees struggle to keep up with new digital applications.
Rachel Clough, UK Country Lead at SD Worx, comments, “In the modern working world, businesses have moved at speed and with purpose to deliver HR solutions fit to boost everything from business outcomes, to employee wellbeing and personal productivity. However, when it comes to utilising digitalised HR processes for individual employees, many businesses are missing a fundamental factor – education.
“Not all employees in the workplace are digitally native, nor is every employee a ‘computer whiz’, so despite digitalisation being able to support employees in many of their day-to-day tasks, without the knowledge and education on how to use this tech, they are missing out on the benefits of a streamlined and efficient HR platform.
“The call to action is clear – businesses need to leverage this technology to support vital functions such as training and personal development, but also must ensure that all employees are educated on how to use the tech in order to reap the benefits.”
