More Companies Nix the Year-end Bonus; Companies Report Bonus Value Will Be Flat This Year
Published December 22, 2022
The year-end bonus is a tradition for many employers, but this year, companies are taking a more cautious approach, according to survey results released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
In the Challenger Holiday Survey, 27% of employers are not awarding a bonus this year, up from 23% who reported this in 2021. Meanwhile, 81% of companies are leaving the value of bonuses the same as last year.
The results are from an online survey of 252 companies of various sizes and industries nationwide. The survey took place in October and November.
Meanwhile, 29% of companies plan to award a non-monetary or nominal award, down from 35% who reported this in 2021.
While more companies are opting to keep bonuses the same amount this year, in 2021 a high proportion opted to increase the year-end reward. The 17% of companies who increased the monetary value of their bonuses last year was the highest percentage since 2016 when 18.2% increased the value of their bonuses. This year, 81% of companies are leaving the value of bonuses the same as last year.
Many more respondents report they are offering bonuses at other times of the year than in the previous two years (Challenger included this answer choice in 2020). Of the 74% who offer a bonus, 31% report they award it at other times of the year, compared to 22% who reported this last year, and 13% the year prior.
“As companies enter uncertain economic conditions, they are attempting to cut costs while still showing their current workers they are valued,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“Last year, employers needed to step up incentives to retain their employees, hence the increase in value of bonuses, but that situation has flipped somewhat as we enter 2023,” he added.
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As recession fears grew and worker shortages eased, holiday bonuses got smaller in 2022
Published on January 17, 2023
While many companies are still struggling to find workers, labor shortages have eased somewhat. There were 10.5 million job openings in November, down from a record 11.9 million in March but still well above an average of 7 million or so in 2019, before the pandemic. And 4.2 million workers quit jobs in November, typically to take higher-paying positions, down from a peak of 4.5 million late last year but above the pre-COVID-19 level of 3.5 million. “People aren’t moving around as much,” says Andy Challenger, senior vice president of Challenger, Gray and Christmas, an outplacement firm. “Companies and employees are both seeing things are starting to slow down.” … A separate Challenger survey of companies of all sizes, out late last month, also revealed a reduced emphasis on bonuses. Eighty-one percent of firms surveyed said they kept bonuses flat and just 4.3% increased them. In late 2021, 59% kept bonus values unchanged and 17.2% bumped them up. “They’re not increasing bonuses into a slowing economy,” Challenger says. Some companies continued to fatten holiday payouts.