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Q&A with Small Business Currents: Reducing Small Business Risks This Holiday Season

3 Mins read

The holiday shopping season presents exciting opportunities for small businesses but also brings many risks that can potentially impact performance and profitability. During this busy time of year, it’s important for small business owners to be aware of these risks and take proactive steps to help ensure that the holiday season is successful.–Responses courtesy of Kristine Leung, Retail Industry Lead, Travelers

What are some of the most common risk factors for small business owners to keep in mind during the holiday shopping season?

 Some of the most common sources of risk small businesses encounter during the holiday shopping season include temporary hiring, employee safety, cybersecurity issues and theft.

Let’s start with seasonal hiring and workplace safety. We know that the holiday retail period can require many small business owners to add temporary staff to help deal with increased sales, inventory and customers. Can you tell us more about the risks here as well as some of the steps small businesses can take to address these risks?

As a leading provider of workers compensation insurance, we know from our claim data that newer employees are often among the most vulnerable to injury. In fact, according to the 2023 Travelers Injury Impact Report, which analyzed five years of our workers compensation claim data, we found that 42% of workers compensation claims from small businesses involved employees who had been in their role for less than one year.

Knowing that newer employees, including seasonal workers, are more vulnerable to injury, small business owners should train seasonal workers just as they would full-time or permanent employees. Depending on the type of small business and roles they’re looking to fill, it may make sense to consider the complexity of the tasks assigned to seasonal employees. Employers could also consider enlisting veteran employees to assist in bringing new ones up to speed.

Beyond training, consider the risks associated with a packed stock room, an overcrowded sales floor, increased online and in-store pickup orders, holiday decorations and more store traffic. To help ensure that employees can move around safely, check that spaces are not crowded with excess merchandise or boxes. Also, stack boxes at a safe height and don’t overwhelm endcaps with merchandise that might topple over and injure someone.

Remember that a safe work environment doesn’t happen by coincidence. Small business owners and their managers must be fully engaged in creating, implementing and communicating safety programs designed for their business. And employees need to understand their role in making the workplace safer.

It seems that some of these best practices could also help prevent potential incidents with customers. Would you agree?

Yes, they could. For instance, making sure in-store aisles and outdoor pathways are clear and easily walkable for customers is an important safety measure. Avoid similar risks on sales floors as in stock rooms, such as stacking boxes too high. Monitoring floors for any water being tracked into a store due to snow, sleet or rain – and ensuring it is promptly wiped up – can help prevent a customer or employee from potentially slipping and falling. Also, encourage all employees to immediately communicate any safety issues or concerns so they can be quickly addressed to help protect both themselves and customers.

Something taking over the news lately is the proliferation of retail theft. As we head into this heavy sales period for retailers, what should small businesses keep in mind when it comes to risks surrounding theft in the workplace?

According to the National Retail Federation’s National Retail Security Survey, both internal and external theft accounted for nearly two-thirds (65%) of retail losses last year. With more merchandise, more employees and more customers during the holidays, it’s important to have steps in place to protect inventory.

This can include conducting background checks on seasonal hires, installing security cameras inside and around the perimeter of your property and vetting vendors, suppliers and logistics partners. Additionally, have supervisors visible on the sales floor, evaluate daily transactions, review security camera videos and validate voided or deleted transactions to help mitigate theft.

We’ve talked a lot about physical risks, but what about cyber risks? What should small business owners look out for and how should they mitigate these risks?

Every small business owner needs to think about cybersecurity. Even if small businesses don’t have an online sales presence, they are still vulnerable to potential cyber risks through other channels. Adding layers of protection, such as multifactor authentication (MFA), to verify only employees are accessing work-related systems, such as online payments to vendors, company email or work computers, can go a long way in reducing cyber risks.

According to the 2023 Travelers Risk Index, only about four in 10 small businesses (39%) use MFA for remote or administrative access to systems, and roughly one-quarter (27%) have implemented a cybersecurity incident response plan.

There are many steps small business owners can take to help prevent cyberattacks, such as implementing MFA and endpoint detection and response, regularly backing up data, promptly patching vulnerabilities and developing an incident response plan. While there’s no way to fully prevent cyberattacks, it’s crucial to take a focused approach when responding to one.

Holiday worker stock image by Lysenko Andrii/Shutterstock

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