Are you still feeling the crunch from the economic and financial crisis? Although reports say the economy is recovering as of the third fiscal quarter in 2009, many small businesses are still experiencing cutbacks and reduced revenues from previous years. As a result, many small business owners say they will not have a holiday bonus for their employees.
Holiday bonuses can be a big expense for small businesses. A small business with 100 employees could spend up to $10,000 on bonuses of just $100 to each worker. And even though employees may have come to expect a holiday bonus, some businesses are giving the news that it will not happen this year.
A poll conducted by American Express Small Business Division found that fewer small business owners were planning on holiday bonuses or gifts to employees. Only 31 percent of those surveyed said they planned on giving a holiday bonus, compared to 44 percent in 2008.
And only 35 percent of small business owners planned on giving gifts to employees, down from 46 percent last year. 42 percent of those that do plan to give holiday gifts said that they will spend less on each gift, or give fewer gifts in order to save money. Average total expense for employee gifts is expected to be about $455 in 2009, which is about the same as 2008. However, compared to an average $1,483 spent on employee gifts in 2007, we see that small business owners have really felt the crunch due to the economy.
Employees who miss out on the annual holiday bonus might be comfortable with that fact if they are compensated with a suitable raise. However, most employees will be disappointed in that respect as well. Only 16 percent of small business owners said that they planned on giving raises next year, compared to 30 percent last year.
Small businesses are certainly not immune to the economic effects of a recession. As a result, employees who enjoy working for small businesses need to appreciate the job they have, and understand that holiday bonuses are a form of profit sharing. If there’s little or no profit to share, then it’s time to continue focusing on the bottom line and keeping the business afloat.
