SurePayroll Insights Survey: Small Business Owners Innovate to Compete with Big Business Holiday, Bonus Practices

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Survey suggests most small business owners need to be creative with employee time-off and rewards.

While small business owners can't always provide what larger businesses can, they have the freedom to provide alternative benefits larger businesses that have to follow strict corporate policy can't

A recent survey conducted by online payroll service SurePayroll reveals that 89 percent of small business owners believe their employees work very or moderately hard, and strive to compete with big business reward practices by working around small business limitations.

While the survey suggests small business owners understand they cannot always provide the same types of perks as offered by many large corporations, responses indicate that many of them actively look for creative ways to reward employees.

"We do 'wellness' hours. If you use them when you are sick you get paid. If you don't use them you get the money as a bonus twice a year," explained one respondent. "This seems to work to prevent the 'use it or lose it' mentality."

Still, the survey shows that many small business employers attempt to offer conventional, big business methods for providing employees time off. The largest group of respondents (34 percent) offer new, full-time employees around one week, or 40 hours of paid vacation time in their first year. The second largest group (30 percent) offers first-year employees around two weeks, or 80 hours of vacation.

According to a recent survey conducted by Monster, small business vacation policy is in line with that of general vacation policy in America. The Monster survey found that 70 percent of Americans have 15 days or less of vacation time.

  • Small business owners follow big business sick time policy -

The largest group of small business respondents (43 percent) also indicated that they follow the big business practice of offering employees designated "sick time." According to a 2006 study by Mercer Human Resources Consulting, the average U.S. company offers employees 8.1 designated sick days a year.

The second largest amount (35 percent) of small business owners said they provide "PTO" or general, personal time off hours from which their employees can draw for sick time.

54 percent of respondents said they believe their employees often take advantage of the system and call in sick when they are really not.

These results indicate that small business employers are not necessarily more trusting of their employees than big business employers, which are increasingly cutting back on the amount of sick days offered to combat employees abusing the system. A recent Denver Post article cited Merrill Lynch & Co. as an example - earlier this year the employer of more than 60,000 downsized the amount of sick days it offers from 40 to three.

  • Most small business owners offer fewer holidays than most large businesses -

According to the survey, small businesses observe nearly 7 holidays each year. Big businesses might have slightly more flexibility in allowing employees set holidays. According to information in Title 5 of the U.S. Code, U.S. companies commonly provide nine or 10 days a year as public holidays.

However, many small business owner respondents stated that they go above and beyond standard holiday practices, looking for new or different ways to offer holidays.

In fact, 55 percent of respondents replied that they honor their employees' non-mainstream holidays, and some specifically stated that they provide employees with special rewards for holidays. For example, one owner reported, "We normally provide them with a special gift or bonus for Christmas and we normally take them on a two-day trip somewhere special for the New Year."

SurePayroll President Michael Alter says that's common for small businesses that may not be able to provide all the standard perks that big businesses provide.

"While small business owners can't always provide what larger businesses can, they have the freedom to provide alternative benefits larger businesses that have to follow strict corporate policy can't," he says. "Small business owners get very creative and small business employees often feel that they've come out ahead."

  • Most small business owners favor merit-based bonuses -

While the majority of small business owners provide holiday incentives, the survey suggest that only 12 percent offer holiday bonuses.

Instead, the majority of respondents (45 percent) said bonuses were merit-based, or rewards reflecting individual skills and performance. The remaining small business owners said they either do not provide any bonuses or offer other forms of bonuses, such as profit sharing and sales bonuses.

"Small business owners are usually entirely or largely dependent on the hard work of their employees on a day-to-day basis, making them more likely to favor bonuses based on individual performance rather than factors such as time of the year," said SurePayroll President Michael Alter. "Going above and beyond in a small business environment will hardly ever go unnoticed."

  • Additional insight -

Some small business owners offered additional insight and advice on vacation, holidays and bonus policies:

  • "I have been at both ends of the workforce, employee and now business owner. We really try to take care of our employees. However, I do feel that they take advantage of, and for granted, what we offer."
  • "I wish it were possible to give more paid time off, but the reality is that I have to pay someone to cover the shift when an employee is gone, and I cannot afford paying double."
  • "I find employees look forward to time off at holiday time with their families. Happy employees are more productive employees."

About SurePayroll:
SurePayroll is America's largest full-service online payroll provider. In addition to its payroll and ClickFREEâ„¢ tax file and pay service -- which allows a user to complete the entire payroll process in minutes -- SurePayroll provides HR and compliance resources, workers' compensation products and 401(k) retirement solutions designed specifically for small businesses.

SurePayroll also offers a private-label and co-branded payroll service to accounting and banking partners to offer payroll processing to their small business clients.

SurePayroll is passionate about small businesses and their payroll. The company is dedicated to providing an extremely friendly and simple payroll experience -- at a price small business owners can afford. For more information, visit http://www.surepayroll.com.

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Frank Krolicki
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