WorkZone: Small firms not as festive

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For many small business owners, the slowly recovering economy has yet to provide a lot of reasons to celebrate the season and their outlook for 2014 is cautious at best.

So don't expect them to spend much on employees or business associates during the year-end holidays.

An annual survey from American Express found that, compared with last year, fewer small business owners will throw holiday parties for employees, fewer will give their employees year-end bonuses and fewer will send gifts to clients or customers.

A separate report by Office Depot found that of about 1,500 small businesses surveyed, 57 percent had no plans to buy holiday gifts for either clients or staff.

The annual survey by Amex polled 501 small business owners or managers at companies with fewer than 100 employees.

"Business owners have been through a lot in the last handful of years. It hasn't been an easy time," said Alice Bredin, a small business adviser to Amex who is based in Cambridge, Mass.

The timing of the survey may have caught respondents in a particularly pessimistic mode, she said.

It was conducted from Oct. 28 to Nov. 8 -- just weeks after a 16-day federal government shutdown "dampened the spirits of many business owners," Ms. Bredin said.

Despite an optimistic November labor market report from the federal government that showed unemployment was down and employers had added jobs, the economy remains challenging for many small business owners who have had to lay off workers, struggle to find or retain customers and work more hours themselves to stay afloat, Ms. Bredin said.

"It's harrowing to go through a downturn like these business owners have. You don't just bounce back."

Among those surveyed by Amex:

* 32 percent will throw a holiday party, down from 40 percent last year. Those who do will spend an average of $895 on the festivities, down from $959 a year ago.

* 27 percent will give staff year-end bonuses, down from 35 percent last year. A bright spot: those who receive bonuses can expect them to increase to 13 percent of salary from 9 percent in 2012.

* 41 percent will give gifts to clients or customers, down from 51 percent last year. As with bonuses, those who give them will spend more: the average budget for client-customer gifts will be $1,129 compared with $958 last year.

For small businesses who aren't springing for parties or gifts, there are other ways to show employees gratitude, said Piera Palazzolo, senior vice president of marketing for Dale Carnegie Training in New York.

"In a time of austerity and cutbacks, just recognize employees with a note saying what that employee contributed to the team. You have no idea how much people value that. The thank-you note is a lost art."

There are also ways for businesses to recognize the holidays in a modest fashion, Ms. Palazzolo said. "There are alternatives to big holiday bashes that still achieve a sense of bonding, team and celebration in the office."

Among the options she suggested is a department grab bag with a limit of $5 to $10 per gift. "When you present the gift, say what you like about that person."

If the group wants to gather for a meal, schedule a lunch off site to "spend some social time with your team," she said.

Or organize a holiday event to be held in the office. Her company, in fact, plans to hold a potluck meal where everyone on staff prepares a dish they consider to be their specialty.

"Breaking bread is still a good way to bond with people."


Joyce Gannon: jgannon@post-gazette.com or 412-263-1580.

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