Holiday survey: Small biz owners go lighter on bonuses, heavier on charity

Baltimore Business Journal - November 27, 2006

A new holiday survey shows that fewer small business owners will reward their staff this holiday season with bonuses, but more will give time off.

According to the OPEN from American Express Small Business Monitor, a semi-annual survey of business owners, only 47 percent of small business owners say they will hand out bonuses this holiday season compared with 54 percent in 2005.

By contrast, 55 percent of owners surveyed plan to give the gift of time off, up 8 percent from last year.

The survey also shows that overall, holiday gift budgets for clients and customers remained steady at $1,065, on par with last year's average of $1,064 and up from $923 in 2004.

Alice Bredin, a business adviser with OPEN, says the survey results reflect the fact that despite a strong economy, small business owners have felt a financial pinch from higher gas and energy costs.

As a result, she says, they are "cautious about the future, they are keeping a watchful eye on their money, investing where it matters to grow the business -- customer service, technology and, in particular, health benefits for employees."

Other survey findings:

- Thirty-one percent of small business owners attribute their success to their ability to create good relationships and a sense of community through their business.

- More owners from the Northeast (60 percent) plan to give year-end bonuses to their staff than their counterparts in other regions of the country: 49 percent in the South, 45 percent in the West and 36 percent in the North Central states.

- More owners from the South (68 percent) plan to thank their staff with time off versus 50 percent in the West, 47 percent in the Northeast and 46 percent in the North Central states.

- Of those surveyed, 58 percent of small business owners in the South will have a holiday party for their staff, 54 percent in the North Central states, 52 percent in the Northeast and 47 percent in the West.

- According to the survey, the gift of choice for business owners to their clients and customers remains sending cards and calendars (48 percent). Other top gift items are gift certificates for retail or restaurants (29 percent), followed by unique company branded or monogrammed items (24 percent), fruit/food baskets (22 percent), donations to a charity on their clients' behalf (19 percent), and flowers/plants and wine/liquor, (tied at 7 percent).

The OPEN from American Express Small Business Monitor, released each spring and fall, is based on a nationally representative sample of 625 small business owners/managers of companies with fewer than 100 employees.

The survey was conducted via telephone by International Communications Research from Sept. 12-27. The poll has a margin of error of +3.9 percent.