A recent survey by the Freedom Economy Index (FEI), a joint project of PublicSquare and RedBalloon, reveals that 42% of America's small businesses are unable to give Christmas bonuses this year, while 28% plan to offer smaller bonuses than last year. The findings underscore the deepening challenges small businesses face due to high inflation, expensive capital, and a slowing consumer economy.
'Bidenomics is the Grinch at this year's Christmas party,' said RedBalloon CEO Andrew Crapuchettes. 'Inflation has crept in to steal the tree, the presents, and even the 'roast beast.' America's small businesses are simply trying to stay afloat in this difficult economy.' The survey also found that 52% of retailers report Black Friday and overall Christmas sales are 'much slower' than last year, and 8 in 10 businesses said their supplier prices increased over the past month.
'Consumer spending is feeling the pinch due to exacerbated economic conditions, making it challenging for the average American to adhere to their customary Christmas budget,' observed Michael Seifert, CEO of PublicSquare. 'This economic squeeze is compelling small business owners to tighten their belts.' The full weight of inflation is evident in comments from small business owners, including phrases like 'It's strangling us,' 'Crushing my business!' and 'We have been financially bleeding out for months. If things don't change soon, we are in trouble.'
To cope, 59% of respondents say they are working more hours than last year, with over half working more than 50 hours per week. Reasons cited include 'I can't afford to pay my employees as much so I have to do their work' and 'Rising costs of doing business and not being able to charge what is reasonable without losing clients.'
The survey also highlighted a disconnect between college graduates and workforce realities, with 91% of respondents believing colleges create unrealistic expectations about post-graduation job life. Salary levels, work hours, and work difficulty were ranked as top areas where students face difficulties. 'It used to matter where you went to school, but our business owners now ask, 'What have you done?'' said Seifert. 'Having four years of industry experience increases your likelihood of being hired. However, what your major is will also impact the evaluation process. Without a business major, you may face challenges in the assessment.'
For HR vendors, these trends signal a shrinking market for bonus-related products and services, as well as increased demand for cost-effective workforce management solutions. The data from the Freedom Economy Index and insights from RedBalloon and PublicSquare suggest small businesses are prioritizing survival over traditional perks, which may lead to a shift in HR strategies toward retention and efficiency tools.
