Hewitt Survey Reveals Record Low for U.S. Holiday Bonuses
December 15 2009 - 9:00AM
Business Wire
Most U.S. employees hoping to get a holiday bonus to supplement
the small pay raises they saw this year may be disappointed. A new
survey from Hewitt Associates, a global human resources consulting
and outsourcing company, shows the number of companies offering
traditional holiday bonuses in 2009 are at record lows. While the
current economy has accelerated the decrease, Hewitt’s research
shows a steady trend away from these bonuses toward the adoption of
more formal pay for performance programs to reward and thank
employees.
Hewitt’s annual Holiday Bonus survey of more than 300 companies
shows that less than a quarter (24 percent) are offering holiday
bonuses this year, down significantly from 42 percent in 2008. Of
those giving bonuses, nearly half (49 percent) will give cash,
spending a median of $250 per employee. Thirty-nine percent will
give gift cards, with a median value of $35 per employee, and 22
percent will give food (e.g., turkey or ham).
Replacing holiday bonuses are variable pay programs, which have
increasingly emerged as the primary pay for performance vehicle for
employers and make up a greater portion of an employee’s overall
compensation package. According to Hewitt research, average
employer spending on variable pay as a percent of payroll has
steadily increased over the past decade, from 9.7 percent in 2000
to 11.2 percent in 2010. On the other hand, average pay raises have
been steadily decreasing. In 2000, average salary increases were
4.3 percent compared to just 1.8 percent, in 2009.
“Holiday bonuses have been falling out of favor in recent years
as companies face increased pressure to reduce costs and are more
focused on growth and performance,” said Ken Abosch, head of
Hewitt’s North American Broad-Based Compensation Consulting
practice. “Instead of giving arbitrary, across-the-board bonuses,
employers want to find ways to appropriately reward their highest
performing employees. And they are doing this by reserving more of
their compensation budgets for bonuses that are based on
performance and must be re-earned each year.”
Companies Hosting Holiday Parties Down Slightly
In addition to cutting back on holiday bonuses, fewer employers
will host holiday parties this year. According to Hewitt’s survey,
60 percent will fund holiday parties, down from 71 percent in 2008.
Of those that do host holiday parties, the median amount
organizations plan to spend is $15,000, down from $19,000 in
2008.
Aside from smaller budgets, most employees can expect to see
parties similar to years past. A little more than half (51 percent)
will hold parties after work hours and 61 percent plan to host them
at off-site locations. Fifty-five percent plan to allow employees
to bring significant others.
About Hewitt Associates
For more than 65 years, Hewitt Associates (NYSE: HEW) has
provided clients with best-in-class human resources consulting and
outsourcing services. Hewitt consults with more than 3,000 large
and mid-size companies around the globe to develop and implement HR
business strategies covering retirement, financial and health
management; compensation and total rewards; and performance, talent
and change management. As a market leader in benefits
administration, Hewitt delivers health care and retirement programs
to millions of participants and retirees, on behalf of more than
300 organizations worldwide. In addition, more than 30 clients rely
on Hewitt to provide a broader range of human resources business
process outsourcing services to nearly a million client employees.
Located in 33 countries, Hewitt employs approximately 23,000
associates. For more information, please visit www.hewitt.com.
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