Lets say you have 5 employees. a 25 cent raise per year is 8*5*.25 = $10 more per day. Lets be generous and say you have 20 employees... Thats $40 more per day. Or the profit off of 1 sign... I doubt you have 20 employees as a sign shop. So if you cant afford a .25 cent raise each year... might be time to re-think your business strategy!Can't give a raise every year unless you also increase prices....or if everyone's productivity goes up
When your supplier raises prices on products, do you not pass that increase onto your customer? Inflation works the same way... If your employee doesn't earn more each year, theyre stuck making less and less because of price increases.
I mentioned before that a new company opened shop in our area with a Dhurst printer, underbid everyone by 50% and got all of the traffic signs at pretty much no proffit. Our company used to be mainly screen printing, we were very, very heavily into traffic signs... so the company felt it bad. For a period there was almost no work. The owners refused to let anyone go, gave them all a small raise... and did it by taking out a second mortgage on his personal house after exhausting all loans/credit. He wasn't sure if the company would bounce back, but he didn't think the employees should suffer for his choices not to diversify, etc.
That's a true boss - Someone who cares enough to put everything on the line for you. The employees are there helping make your business successful just as much as you are (In most cases). You wouldn't take a pay downgrade every year, would you? Because every year you don't do cost of living... thats exactly what your employees are doing. Working for less.
[Edit] Btw, I don't expect every owner to do something like that. It's extreme, and I doubt I'd do it even.
I just find it funny people always say theres no more loyalty from employees... That they leave for 10-25 cents an hour more and job hop. I can guarantee you 90% of them employees feel like the Company wasn't loyal to them. And if they feel that way... why not move on? If you don't want to give cost of living raises, or even normal raises... that's fine, but don't be surprised when your employee does move on.. The #1 thing I've seen a lot of owners/managers not get... is it isnt always about the money. I've seen plenty of people move on from every job I've been at... Friends, family... the one thing they have in common is they're not enjoying their work, they don't feel appreciated... and it was just time to look for something new.