Canadian small business owners are sacrificing their pay cheques and bonuses this year to spread holiday cheer to their employees.
More than half of Canadian small business owners said they will make some sort of sacrifice in order to recognize employees and clients. Some are not taking a raise (25 per cent) or a bonus (23 per cent). Others are taking a pay cut (16 per cent), according to a survey conducted for American Express.
Even with these sacrifices though, employers are being forced to cut back on recognition of employees and clients this year, according to an Angus Reid online survey conducted for American Express Small Business Services.
Fewer small business owners will be giving their employees bonuses this holiday season (32 per cent this year compared with 44 per cent last year). They are also less likely to make charitable donations (33 per cent down from 40 per cent), give employee gifts (37 per cent down from 42 per cent) and give client gifts (31 per cent compared with 35 per cent).
However, small business owners are finding less expensive ways to show appreciation to staff and clients. About half are still planning an employee party or dinner this holiday season – the same proportion as last year. And 43 per cent are planning to give employees extra time off over the holidays, up from 39 per cent last year.
“Small business owners know that their employees are key to their company's success,” said Howard Grosfield, vice-president and general manager, Small Business Services, American Express Canada & International. “They are willing to make sacrifices to ensure their employees feel valued and appreciated. We've monitored that trend throughout the recession and owners consistently put the needs of their staff and business first.”
For the survey, a representative sample of 414 Canadian small business owners, who currently have two to 100 employees, were contacted. The margin of error for the total sample is plus or minus 4.9 per cent, 19 times out of 20.
One respondent, a small electronics retail and services business owner in central British Columbia, said his employees are like family, and not giving them a gift would be the wrong thing to do. Knowing that it has been a particularly tough year for his staff, he began working longer hours several months ago and saved the profits specifically for an employee holiday party. Even though his business has suffered a serious slowdown, he expects this year's party to be “better than ever.”
But while small business owners attempt to shield their workers from the effects of the year-end slowdown, the reality of the recession has made cost savings a priority. About three quarters of respondents have introduced some form of cost-reduction policies in the last year for themselves and/or employees.
That includes 48 per cent who have instituted longer working hours, 47 per cent who froze pay, and 45 per cent who reduced spending allowances. Almost one quarter of firms introduced pay cuts in the past year.
While 47 per cent of small businesses saw a drop in business this past year, more than two thirds are “optimistic” that their financial position will improve in the coming year. This has been a consistent finding from American Express Monitors throughout the year: businesses expect to turn a corner very soon.
“Clearly, 2009 has presented small business owners with a number of challenges, as evidenced by the half that have experienced a downturn in their business,” Mr. Grosfield said. “But small business owners have been careful to plan for the eventual turnaround, and it is encouraging to see they are hopeful about the future of their business.”
