Referring more to smaller places like my own - few hundred employees with ~20 person IT team (~10 developers).
I read enough about testing that it seems industry standard. But whenever I talk to coworkers and my EM, it's generally, "That would be nice, but it's not practical for our size and the business would allow us to slow down for that." We have ~5 manual testers, so things aren't considered "untested", but issues still frequently slip through. It's insurance software so at least bugs aren't killing people, but our quality still freaks me out a bit.
I try to write automated tests for my own code, since it seems valuable, but I avoid it whenever it's not straightforward. I've read books on testing, but they generally feel like either toy examples or far more effort than my company would be willing to spend. Over time I'm wondering if I'm just overly idealistic, and automated testing is more of a FAANG / bigger company thing.
We started focusing in on automated testing when we had 3 manual QAs (not including me), and since then every new project has started with plans for automated testing.
It's important to note that we don't do automated tests instead of manual testing. Manual testing is still important for focused review of new features/bugs, but automated tests make sure code changes aren't breaking anything elsewhere.
Also this is all about end-to-end tests (with Selenium, in our case). If you're talking about a lack of unit/integration tests within the codebase itself, that's a huge red flag. Even if quality issues aren't the end of the world, they will definitely make people reconsider using your product. Who wants to trust their financial information with unstable software? It's also making your QA team less efficient since they're having to chase down issues that would be better recognized by the dev who wrote them.