As the holiday season looms, many employers may get the impression that their employees look at them as a Scrooge. Businesses often try to cut corners and save costs to have slightly higher profit margins by the end of the year. However, having too tight of a budge during the season of giving can make employees feel unrecognized and unappreciated. Learning how to better manage your cash flow during the final push of the year can help you improve efficiency while also keeping your employees happy.
End of Year Financial Struggles
The end of the year may be problematic for you for a number of reasons. Many businesses realize an uptick in sales during this time, which means that they have to invest more money in inventory, hiring seasonal help and making other purchases for the business. At the same time, they may be anticipating the upcoming tax season and may be making financial decisions to help decrease their tax liability. Employee bonuses come at a cost and are often left out for other options that will more directly help the business.
Employee Recognition Matters
While it may make fiscal sense to ignore employee bonuses, failing to recognize employees for their year of hard work can cause serious problems within the business. Employee recognition company Gallup found in a massive <survey that only one in three employees reported being recognized in the last week. Furthermore, employees who felt unappreciated were twice as likely to say they would quit their job than others.
In contrast, recognizing employees can provide many benefits to your business. Employees who feel appreciated often feel like an integral part of the business. They will often work harder for the company that believes in them. Some of the benefits associated with employee recognition include:
- Lower employee turnover, decreasing the costs of training new employees
- Improved employee happiness, which boosts productivity and creativity
- Increased employee engagement
- Increased trust and customer liability
How to Manage Cashflow Needs
Meeting the demands of payroll can be difficult for many small businesses at the end of the year. Business owners can consider options to help them manage payroll during the holiday season to show they take this responsibility seriously. One way to accomplish this is to use payroll factoring. This process allows you to sell your accounts receivable in exchange for cash that you can use to manage payroll responsibilities. Many times, customers will not pay until after one or more payroll cycles. This process allows you to continue working hard to run your business without worrying about losing your employees.
Show You Are Not a Scrooge
Using innovative options like celebrating your employees and recognizing their hard work during the last year can help you show your employees that you appreciate them and are not a Scrooge. This recognition can help you start the new year with a fresh start and satisfied staff.
Hosting a holiday party for the people in your company is a great way to let them know you appreciate them and boost morale. However, many small businesses experience a slow-down towards the end of the year, making the budget for a party a little tight. The good news is that you don’t have to spend a fortune to have a successful party.
Things to consider when budgeting for your company holiday party
Avoid using operating capital or going into debt for a party.
While a party can be a big positive for your staff, you don’t want to put the company’s future at risk by borrowing or using your operating funds for the party. This is especially true if December and January are your slowest months, as they are for many businesses.
One thing you can do, however, to raise a little holiday capital is sell your accounts receivables to a third party. Called factoring, this allows you to collect your future payments today and saves you and your staff the time and energy necessary to track down those payments.
Get creative with DIY party accessories.
Having a festive business party doesn’t have to mean spending a fortune on expensive party decorations. Instead, channel your creativity and make your own decorations. Inspiration can be found on sites like Pinterest and from a Google search of office party ideas. Decorating with balloons or wrapped shipping boxes can add a festive air to your party without spending a lot of money.
Hold the party at your facility.
Party rooms and restaurants can be extremely expensive, especially during the holiday season. Save on that expense by having the party at your own office or warehouse. With a little creativity, even a bland office can be turned into a festive site for a party.
Use virtual invitations.
Instead of expensive paper invitations that take time to address and postage to send, consider virtual invitations, such as a text or video invitation or even a Facebook event invitation.
Make it a progressive party.
If you have multiple departments, consider having each department “host” part of the party and move the festivities along from department to department as the event progresses. Not only will your employees feel more invested in the event, but they’ll have an opportunity to show off their special (decorated) work areas.
Hosting a holiday party for your company doesn’t have to break the budget. Raise a little extra cash by factoring your accounts receivable and keep your party small and in-house.