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Bonuses are something people often look forward to all year, imagining how they’ll use the extra cash to pay down debt, treat themselves to a long-awaited vacation or boost their savings.
But for many professionals, this January came with an unwelcome surprise.
A recent poll from talent solutions company Robert Walters Canada revealed that two in five professionals who typically receive an end-of-year bonus found themselves empty-handed this year.
“Wider economic uncertainty and cost-cutting measures have made many businesses reassess their discretionary spending, including bonuses. A lot of companies now are prioritizing long-term financial stability over short-term incentives,” says Martin Fox, managing director at Robert Walters Canada.
Mr. Fox says that some companies are facing tough decisions about how to allocate limited resources, even choosing to forgo bonuses for certain employees to ensure they can retain and promote others.
This comes as a major disappointment for workers, especially considering that 43 per cent of employees in Robert Walters’ annual salary survey guide said they believed they were “firmly on track” to receive a bonus.
“This is the big issue – it’s that dichotomy and disconnect,” Mr. Fox says.
Return of the Great Resignation?
The disconnect between expectations and reality could have serious consequences for companies. According to the Robert Walters poll, 63 per cent of professionals said they would consider leaving their current job in 2025 if they didn’t receive a pay raise, bonus or promotion.
What’s more, employees aren’t always chasing more money. In fact, 27 per cent of workers polled said they’d be willing to move to another organization for the same salary, while almost half (47 per cent) said they would take less money in exchange for things like a stronger sense of purpose, more recognition for their work or greater flexibility.
Mr. Fox says that while salary is a key piece of any compensation package, many workers are weighing other factors heavily.
“Many professionals are prioritizing work-life balance, career development and company culture over just money,” he says. “When these other factors are also not in line with their expectations, that can cause people to look for new opportunities.”
What companies can do
With misaligned expectations driving employees to consider leaving, companies may need to rethink how they approach compensation, communication and benefits. Mr. Fox says that proactive communication and transparency are critical to retaining workers.
“Transparency is key. Employees are more engaged when they understand how the decisions are made and how they get rewarded,” he says.
Mr. Fox suggests businesses should help employees understand the organization’s financial targets and goals and how those objectives impact bonuses and other perks. This kind of transparency can help reduce disappointment by setting realistic expectations early on.
For companies that are unable to provide traditional year-end bonuses, there are other options to help keep employees satisfied. Mr. Fox recommends alternative perks like extra vacation days, additional budgets for professional development or spreading bonuses throughout the year instead of offering a lump sum.
In a year when many professionals feel their efforts went unrecognized, companies that prioritize both financial transparency and non-monetary perks may be better positioned to weather the storm and keep top talent engaged.
Fast fact
Mentors matter
15 per cent
New research from Big Brothers Big Sisters of America shows that mentees typically see a 15-per-cent bump in earnings between ages 20 and 25. The study also found that a mentee’s income is often more closely tied to their mentor’s earnings than their family’s.
Career guidance
Boost your business
According to the Business Development Bank of Canada, there are five key business habits that can make a big difference when it comes to profitability and efficiency – no matter what’s happening in the economy.
Experts suggest conducting a SWOT (strengths, weaknesses, opportunities and threats) analysis, creating a North Star to help guide decisions, evaluating your operations and processes.
Quoted
Back to school
“My York University students gave me advice on whether to take class notes with pen and paper or on a computer. I may yet have to ask them for study tips. My son showed me how AI can be utilized in generating basic summaries of required readings.
Being a student again gives me a greater appreciation of the juggling that young people undertake to pursue their education. I had forgotten this over the years, although it must have been part of my years of university studies in the 1980s,” writes Thomas Klassen in a personal essay that looks at why he’s heading back to university in his mid-life crisis.
On our radar
Higher education
With the cost of post-secondary education climbing faster than graduate salaries, many are questioning if a degree is still a guaranteed path to success. Two recent grads and a recruiter join The Globe and Mail’s personal finance team, columnist Rob Carrick and editor Roma Luciw, on the Stress Test podcast to discuss.