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Small Business Expert Says Productivity-Based Incentives Can Drive Growth for 2011 and Generate New Jobs

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BUFFALO GROVE, Ill., Dec. 21, 2010 /PRNewswire/ — Business owners who install productivity-based incentives in 2011 can drive sales while helping to grow the economy, said business expert Ken Sweet, Executive Director, Consulting Services for GPS. GPS is a management consulting firm based in the Chicago area, which specializes in advising the owners of small and medium-size businesses.

Sweet said a 2010 study by the Bureau of Labor Statistics found that 64% of the 1.5 million net jobs lost in 2008 came from small businesses — those with less than 500 employees.

“These job losses have had a devastating impact on American families,” Sweet said. Citing a report released in September by the Economic Policy Institute, “In 2009 a shocking one in five children in the United States were living in households whose income was below the federally established poverty level. The toll on children is one of the immeasurable impacts of the economic downturn and often gets overlooked in the statistics reported each month showing anemic job growth in the broader economy.”

Sweet said that while the federal government can provide the stimulus to get our economy back on track to help American families rebound and recover, “We know from past experience that the owners of small businesses must shoulder the burden of job creation to lead our nation out of this economic stagnation.”

Sweet cited a report by the Office of Advocacy of the Small Business Administration released in March 2010 which showed that between 80-90% of new jobs created between 1993 and 2008 came from expansions at existing businesses rather than new businesses starting up. Moreover, the report showed that 64% of these jobs were generated by small businesses.

“The primary problem for the job creating engine of small business to get revved up is that small business owners are often reluctant to spend money for business expansion unless they have it in the bank or have strong positive cash flows,” Sweet said. “During times of robust economic expansion this cautionary characteristic of small business owners doesn’t hold back job creation because small business owners are generating positive cash flows to give them the confidence they need to hire more workers to grow their businesses. However, the impact of the recent recession has had the effect of a paralyzing fear for many small business owners who are holding back plans for expansion and hiring new employees until the economy shows greater strength.”

“There is a low-risk alternative for business owners who want to get the jump on their competition as the economy begins to grow. That strategy would be to implement productivity-based excess profit incentives for employees to drive the business forward, increase their own pay, produce more jobs, and stimulate economic growth,” he said.

“Productivity-based excess profit incentives” can be designed for small businesses by qualified management consulting experts. These incentives are paid out only when profits rise as result of the increased productivity. “There is no upfront cost if the incentives are designed correctly,” Sweet added.

“Productivity-based excess profit incentives are a win-win-win strategy for the business owner, his employees, and our nation as a whole. As small businesses become more productive they can expand, hire more workers, and help drive incomes higher to bring back the healthy spending we need to keep our economy growing,” Sweet said.

“Jobs are the key to prosperity, and increasing productivity is the key to creating more jobs. Increasing individual worker productivity to increase overall employment may sound contradictory, but it is not,” Sweet said. “Incentivized productivity results in larger paychecks for employees; larger paychecks lead to more consumer spending; and more consumer spending leads to more jobs, because 70% of economic growth comes from consumer spending. Therefore, implementing productivity-based incentives will drive both business profits and employee incomes higher, which will lead to greater consumer spending, and result in creating more jobs for the benefit of everyone — especially for the children whose parents need a helping hand to climb out of the poverty trap.”

About GPS

GPS is a full-service business development group and general management consulting firm focused on small and medium-size privately held companies in North America.

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