HOLIDAY PARTIES AND PAY BONUSES TOP BUSINESS OWNERS' YEAR-END PLANS FOR EMPLOYEES, ACCORDING TO THE 2004 SMALL BUSINESS MONITOR BY OPEN FROM AMERICAN EXPRESS(SM)
More than Half Plan to Reward Employees with Bonuses; Holiday Gift Budgets for Customers and Clients Fall 4% to $923
NEW YORK, November 16, 2004 -- Small-business employees should find more to celebrate this holiday season, according to the 2004 Small Business Monitor by OPEN from American Express. The survey found that more business owners are planning to celebrate the holiday season with their employees this year (82% vs. 78% in 2003). Among these business owners, 53% say they plan to hold a holiday party; 51% report plans to give year-end bonuses and 47% plan to give time off to employees.
Firms in the North East are the most likely to give bonuses to employees (58%), followed by the South (56%), North Central (46%) and the West (40%).
Overall, 26% of business owners plan to give raises to their employees. Companies in the North Central states are most likely to give raises (29%), followed by the North East (27%), the South (25%) and the West (22%).
According to the Semi-Annual Monitor, business owners plan to do more with less for customers and clients this holiday season. Overall, 69% of business owners plan to buy gifts for valued customers and clients, compared to 57% in 2003. However, average budgets for these gifts dipped 4% compared to 2003 ($923 vs. $966).
The survey found that cards or calendars are the overwhelming gesture of choice toward clients and customers (41%), followed by gift certificates for retail or restaurant purchases (24%) and food/fruit baskets (20%). What are the least popular gifts? Just 9% of respondents plan to give flowers or plants to their clients and customers.
“Businesses continue to see the importance of making customers and staff feel appreciated during the holidays,” said Alice Bredin, small business advisor for OPEN. “Recognizing people – especially staff – for contributing to the firm's success can generate a tremendous amount of good will toward the company.”
While owners are giving gifts to their employees and clients, they're also giving back to their communities this holiday season. Twenty-one percent will organize a group volunteer activity for employees. Women business owners are more than twice as likely as their male counterparts to make volunteerism a part of holiday activities (29% vs. 14%).
“Beyond monetary compensation and parties, firms are also giving their time this year – through company volunteerism or just by giving workers a day off,” said Bredin. “There are countless ways to celebrate a good year. Even for companies on tight budgets, sending holiday cards with a personal note can make employees feel very appreciated.”
Winning Tips for Holiday Season Bonuses
While simple gifts can boost company morale, holiday bonuses remain a popular motivational tool, even for staff at the smallest business. But how bonuses are planned and administered can impact how successful they will be. Bredin suggests that business owners consider the following when planning to give bonuses this holiday season:
- Determine if you can afford to give bonuses. Your staff may be counting on a bonus this year, but can your business spare the cash? Take a good look at the economic climate and your overall business status to determine if bonuses are realistic.
- Manage employee expectations. To maintain a good atmosphere in your company during bonus time, this is important. If hard times prevent you from providing bonuses, make sure employees understand the circumstances and are confident you are taking steps to improve things for next year.
- Tie bonuses to goals. Bonuses should be non-subjective, measurable, and performance-oriented, so clearly align bonuses with company or staff goals. If you did not set goals with staff this year and still want to give bonuses, you can tie performance and employee contributions to recognized company goals.
- Choose bonus amounts carefully. There are no hard-and-fast rules for setting bonus amounts, except that you should make bonuses equitable among peer groups and always have performance justification.
- Acknowledge all staff. When you are allocating bonuses, don't forget the behind-the-scenes people who have made the big orders, the successful client presentations, and the travel arrangements possible. They are often instrumental in making other functions of the company operate smoothly as well. Try to include them in your bonus-giving plans.
- Give the gift of time. If you can't afford to give bonuses this year, give the next best thing – time. Extra time off during the holidays, or an opportunity to come in late one day a week, for example, demonstrate your appreciation of your staff.
Survey Methodology
The OPEN Small Business Network Semi-Annual Monitor, released each March and October, is based on a nationally representative sample of 773 small business owners/managers of companies with fewer than 100 employees. International Communications Research (ICR) conducted the survey via telephone from September 13-27, 2004. The poll has a margin of error of +3.5%.
About OPEN: The Small Business Network from American Express
OPEN: The Small Business Network is a division of American Express that offers small business owners a wide range of tools, services and savings designed to meet their evolving needs, including charge and credit cards, convenient access to working capital and credit information, enhanced online account management capabilities and savings on business services from an enhanced lineup of partners. To obtain more information about the OPEN Network, visit OPEN.americanexpress.com or call 1-800-NOW-OPEN to apply for a card or loan.
American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.
Contacts:
Channing Barringer
212.640.0512
Channing.K.Barringer@aexp.com