Tips for Handling Annual Raises and Reviews
BEO 10-29-23 A&B FINAL
As the end of the year approaches, small business owners will find themselves facing several challenges. Two critical issues are annual reviews and raises for employees. To help navigate these tricky topics, Circle City Broadcasting CFO Ty Shea provided advice.
Shea says that for most small businesses, personnel costs can be the largest expense. Thus, annual raises could dramatically impact your bottom line, so business owners should ensure raises do not outpace growth.
Conversely, Shea says retaining employees is critical, and losing staff due to lack of pay raises can be more costly. Retraining new staff is expensive, and a pay raise for current staff might be the smarter business decision in the long run.
Regarding annual performance reviews, Shea says, “In a perfect world, there shouldn’t be too many surprises.” Employees should be getting feedback on their performance regularly throughout the year. Instead, an annual review should be more like a recap of that feedback.