Nearly four out of five employers plan to offer some type of year-end bonus or gift this year, but most are not the kind Wall Street gets, which this year is likely to surpass $164,000, on average, according to outplacement consultancy Challenger, Gray & Christmas.
In the survey, 78 percent of respondents said their companies are offering a year-end gift or bonus, up from 53 percent a year ago, according to the survey of about 100 human-resources professionals in November.
About half of companies awarding bonuses plan to give monetary bonuses based on company, departmental or employee performance, up over last year’s 44 percent.
The other half of respondents said their companies are handing out smaller monetary or nonmonetary gifts, typically worth less than $100, including gift cards, cash or a gift.
“Employers across the country have picked up the pace of hiring this year. As the pool of available talent gets shallower, it is critical that companies not overlook the importance of retention,” said John Challenger, CEO of Challenger, Gray & Christmas. “The need to keep the talent they already have is undoubtedly a driving factor behind the increased percentage of employers awarding year-end bonuses.”
Increased corporate profits are also driving year-end bonuses, the firm said.
In the third quarter, corporate profits reached a record high of nearly $1.9 trillion, according to the latest data from the Bureau of Economic Analysis.
With rising profits, about 22 percent of survey respondents said their companies were increasing the amount of year-end bonuses, although 77 percent planned to keep bonus levels the same as last year.
Last year, Wall Street bonuses rose 15 percent to an average of more than $164,000, according to a report from the New York State comptroller. Challenger said that average will likely increase again this year, thanks to a strong stock market.
“As the economy keeps improving and hiring continues to accelerate, employers may have to up their game when it comes to year-end awards,” Challenger said.