Holiday Bonuses: A Key Factor in Employee Retention
New research reveals that holiday bonuses may be more crucial for employee retention than many employers realize. According to a recent survey by Agital, over one-third of workers would consider changing jobs if their holiday bonus was eliminated.
The study, which surveyed more than 1,500 U.S. employers and employees, found that 55% of workers consider holiday bonuses a significant factor in their job satisfaction. From the employer perspective, the benefits are clear: 82% report that bonuses boost workplace morale, and 80% view them as necessary to remain competitive.
Interestingly, while 60% of employers plan to distribute holiday bonuses this year, only 42% of employees expect to receive one. The most common bonus range is $100-250 (over 25% of cases), followed by $251-500 (21%) and $501-1,000 (22%). Larger bonuses exceeding $1,000 are less common, representing just 15% of total distributions. Construction, finance, and tech sectors lead in bonus distribution.
The survey also revealed that employees strongly prefer cash bonuses over other forms of compensation. Given the choice, 83% would choose a cash bonus over company stock options of equal value, and 75% would select cash over equivalent paid time off.
Paul Lewis, founder of cyber storage company Calamu and former Inc. 500 entrepreneur, warns against discretionary bonuses. "If you reduce a bonus from $1,000 to $800 due to company performance, you've just spent $800 to become the bad guy," he explains. Instead, Lewis recommends implementing performance-based bonuses tied to measurable metrics like billable hours or lead generation.
Lewis also emphasizes the importance of careful bonus administration. He shares a cautionary tale where a $50 bonus difference between two similarly paid employees—caused by an Excel rounding error—led to one employee's resignation. "He thought I was sending him a message," Lewis recalls. "Whether true or not, employees interpret bonus amounts as indicators of their value to the company."
The key takeaway for employers? Bonus systems should be transparent, measurable, and carefully administered. Even small discrepancies can have significant impacts on employee morale and retention.
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The Rise of Experiential Gifting: From Pandemic Recovery to 2024
The trend toward experiential gifts - from travel and dining to live events - has seen remarkable growth since the pandemic restrictions eased in 2022, with recent surveys indicating even stronger momentum heading into 2024.
According to Deloitte's 2024 holiday retail survey spanning 4,000 U.S. consumers, experience-related spending is projected to reach $735 this holiday season, marking a 16% increase from the previous year. This represents a dramatic recovery from the pandemic low of $465 in 2020 and significantly surpasses pre-pandemic levels of $539 in 2019.
The shift is reflected in broader spending patterns as well. Deloitte notes increased demand for "party apparel and decorations," with non-gift spending expected to rise 9% year-over-year to $507, well above the 2019 average of $389. In contrast, traditional gift spending is projected to decrease by 3% year-over-year to $536, showing only modest growth of 4.9% compared to 2019's $511.
Recent Survey Insights:
TD Bank's 2024 Merry Money Survey reveals that 45% of 2,000 U.S. shoppers surveyed plan to prioritize experiences over physical gifts. This preference is particularly strong among younger generations (Gen Z at 68% and millennials at 61%) and higher-income households, with 55% of those earning $100,000+ choosing experiential gifts. Dining experiences emerged as the top choice at 53%.
The Amex Trendex survey, covering over 13,000 global consumers, found that 38% plan to gift experiences to their significant others and 32% to their children. Entertainment leads at 59%, followed by travel (54%) and food and drink (49%). Notably, 69% of respondents preferred sharing experiences or trips with friends over traditional gift exchanges.
JLL's 2024 Holiday Shopping Survey highlighted a 56% increase in holiday-related experience spending and a 60% rise in holiday food and decoration expenditure, compared to just a 10% increase in planned gift spending.
Historical Context and Research
This shift toward experiential giving predates the pandemic. A 2019 Momentum Worldwide survey of 3,200 global consumers found that 76% preferred spending on experiences over material items. The study revealed specific motivations: 58% sought escape from daily life, 70% desired fun and laughter, and 63% wanted learning opportunities. Brand attributes related to "inspiration and meaning" saw a 200% increase in importance from 2012.
Elena Klau, global chief strategy & product officer at Momentum Worldwide, attributed this shift to broader societal changes, including increased stress levels, declining institutional trust, and technology-induced disconnection.
Academic research supports these findings. Studies from the McCombs School of Business at The University of Texas demonstrate that experiential purchases provide more lasting satisfaction than material goods. As Assistant Professor Amit Kumar noted, experiences "live on in our memories and in the stories we tell other people," while material goods' perceived value tends to diminish over time.