Workforce dynamics & tech advancements supporting the growth of middle market businesses, Aon

A new study conducted by insurance and reinsurance broking group Aon and the National Center for the Middle Market (NCMM), has revealed two key trends that are supporting the growth of middle market businesses: workforce dynamics and technology advancements.

It’s important to note that research was conducted through online surveys of 400 financial decision makers at middle market businesses across the US and Canada between June 27, 2024, and July 17, 2024.

Respondents included senior leaders actively involved in financial decision-making at businesses with more than 500 employees and annual revenue between $50 million and $1 billion.

Don Ortegel, executive vice president, North America at Aon, commented: “Our research with the NCMM tells us the most successful middle market businesses are focused on investing in their people and unlocking potential with artificial intelligence (AI). Aon is committed to providing middle market businesses the right insights and expertise to help them grow while mitigating ever-growing risks.”

Doug Farren, managing director of NCMM, said: “NCMM studied a variety of topics over the years related to middle market growth, but never specific deep dives into the topics of talent, risk and technology. The collaboration with Aon will benefit middle market organizations looking for data-driven insights and takeaways for implementation.”

Data from the study shows that high-growth businesses – defined as those that reported 20% or higher annual increases in revenue – recognise their workforce as a vital differentiator, with these organisations consistently reporting that people are critical to their growth, with talent ranking as a top growth driver.

In fact, 23% of technology and business services firms cited their people as being the key differentiator of their business model.

However, the study does highlight that midsized firms are struggling to create total rewards programs to attract and retain key talent, with a notable 57% of high-growth businesses struggling to sustain competitive benefits, and 47% of average-growth businesses struggling too.

“The research clearly shows that a strong, well-supported workforce is at the heart of sustainable growth for middle market businesses and highlights how businesses can attract and retain top talent to maintain their competitive advantage,” Ortegel added.

In addition, technology continues to play an important role towards shaping the future of middle market businesses, but the study warns that this rapid technological adoption comes with increased risk.

Nearly a quarter (22%) of company’s now rank cybersecurity as their top organisational risk, and nearly half (48%) of middle market businesses surveyed said that they have experienced a cyber breach within the past three years.

Interestingly, in spite of the cybersecurity risks, only 30% of middle market firms have prioritized risk management expertise in their hiring over the past 12 months. Among high-growth businesses, this figure has risen to just 38%.

Artificial Intelligence (AI) also continues to be a key topic across the sector, with more than half (60%) of middle market businesses, and more than three-quarters (78%) of high-growth firms revealing that they have made progress in adopting the technology into their company.

“Middle market firms are embracing technology at an impressive pace, but the research shows there is still a gap in cybersecurity preparedness. These insights provide valuable benchmarking data to help businesses strike the balance between innovation and risk management,” Ortegel concluded.

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