The last month of 2010 ended on a high note for small business employees, with pay up 0.6 percent over November, according to the Surepayroll Small Business Scorecard. There's no doubt we can attribute much of December's increased pay to heightened holiday hours. The good news is that wages are up 1.2 percent year-to-date. While that's not enough of an increase to significantly change the life – or spending habits – of any small business employee, it's not bad considering pay has been nosediving since January 2008.
As businesses began to see an uptick in activity this year, employers have turned to existing employees to make up for the slack. As expected, we've seen wages begin to increase slightly during the last half of 2010. Though nowhere near where they were a couple of years ago, the recent increase is a sign that we're in the first step of a 3-step recovery mode that will eventually bring the larger employment numbers we need for a healthy economy.
First, existing employees need to be brought to full employment, getting back the full-time hours they worked pre-recession. Then businesses will begin paying existing employees overtime to make up for the extra workload that would have been filled by a larger workforce of the past. And when employees are finally at their work capacity, employers will start to hire new employees.
I can say with certainly that we're on the road to recovery, but by most estimates it's happening way too slowly to get us to an acceptable unemployment rate in the next few years. With a national unemployment rate near 10 percent and a rapidly increasing population, we will most likely see the gap widening between the 'have -jobs' and 'have-no-jobs' over the next 12 to 24 months – not the extreme improvement we need to bring most workers to full and flourishing employment.
As a business owner your best course of action is to play it safe and focus on actions that can help ensure your business makes it through the next couple of years of slow growth.
- Hire employees behind demand, relying on your current staff to pick up extra hours, duties and responsibilities until you are sure you need extra bodies. During this time you may need to rely on them more than ever before, so be sure you're treating them like gold so they will be willing to pick up the slack.
- When your demand outpaces your staff and you need to hire, take your time in making sure you choose the right talent that fits your culture. There is a large and eager workforce available that will allow you to get the best talent possible. And if for any reason you don't hire the right fit, terminate quickly.
And as far as general business operations, continue to operate lean. Look to technology to provide more productivity. At SurePayroll, the launch of our mobile payroll app a year ago was a bigger hit than we could have imagined because business owners need to find faster, more effective ways to get business done. The world is full of technology that will save you time and money.