Do Seasonal Bonuses Help Retain Talent?

20It’s that time of year again–the time of year for giving and getting. In many workplaces, this also means it is time to give out or eagerly await a seasonal bonus.

According to Accounting Principles, a recruiting agency, this year, most workers can expect a bonus and even a larger one than they received in 2015. The average 2016 bonus will be $1,081. While 25% of organizations have no plans to offer a bonus to employees, some of these organizations have other plans in place, including perks or bonuses distributed out throughout the year. While a seasonable bonus–most often simply known as a “Christmas bonus”–is a time honored tradition in business, is it actually good for business?

How Seasonable Bonuses Can Support Talent Management

The number one reason to give a seasonal bonus is that they are known to promote workplace engagement. When you give a bonus, you are telling your employees that they matter and that you have their best interest in mind. You’re also making sure they can cover all their additional seasonal costs from presents to travel without breaking the bank. Dan Macklin, who runs a small publishing company in New Jersey, told Talent Management 360 that he always gives bonuses: “We don’t make a lot, and I only have five full time employees, but we always come up with a small bonus–$500 per employee–and this is really appreciated. I think it has helped my retention over time, even though it’s a pretty small amount. If I could give more I would, but our scale is very small, and publishing has been a tough industry lately.”

While not giving a bonus is understandable in some sectors (e.g., higher education and not-for-profits),  it is also important to avoid doing the opposite. One employee interviewed for this article reported being asked to donate to her organization in December. “I live in New York and in December, the cost can be high–whether you’re a owner or renter in a doorman building, you are expected to give anywhere from $500 to $1500 in tips to the building staff, and I understand–they deserve it,” says Karen Rosenthal.  “But a few years ago, I had a new executive director at work and on December 15 she announced that she wanted everyone to donate to our organization for Christmas! She felt that if she could say that 100% of her employees donated over the past year, it would be a good way to get donations from people outside the organization! None of us had had a raise in four years, and we weren’t expecting a bonus, but being asked to donate was a bit much–it really had a negative impact on morale.”

What to Gives and How Much

So giving is good for engagement, but if so, how much to give and how to give it? If you’re a large business consider sharing a percentage of the profits. If you do this every year, you protect yourself too. After all, if the bonus is based on profits, you will not feel obliged to give when business is down. If you’re a smaller business, a set amount (e.g., $100 to $500 depending on an employee’s status and years of service) may be fitappropriate–or even a gift. While cash can be more welcome than a gift, a gift or gift card may also be appreciated. Bear in mind that most of your employees are also likely scrambling to buy gifts. A $50 gift card for Barnes & Noble or another bookstore may be deeply appreciated at this time of year. Likewise, you may decide to give gifts that not only have the potential to engage employees but also carry other secondary benefits. Today, a growing number of employers are also giving boomerang gifts, such as free passes to a local gym or yoga studio. While health-related gifts, like a gym pass, may appear to be overstepping one’s boundaries, many employees and employers consider such gifts a win-win situation. Most employees are happy to have access to a gym and/or fitness classes and employers benefit by lowering the number of sick days and injuries reported by employees year round.


December 5, 2016   Updated :December 7, 2016      

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