Increasingly, employers are relying on variable pay, including bonuses, to hire and retain the best workers.
Data collected for PayScale’s 2018 Compensation Best Practices Report show that 71 percent of organizations offered variable pay last year. Top-performing organizations were more likely to offer these incentives: 79 percent vs. 70 percent of typical businesses.
From the report:
Interestingly, the number of organizations offering spot bonuses decreased year-over-year from 46 percent to 39 percent while individual incentive and hiring bonuses increased, 67 percent vs. 64 percent and 34 percent vs. 27 percent, respectively. We also asked about some additional types this year and found that 39 percent offer employee referral bonuses, 30 percent offer company-wide bonuses and 22 percent offer profit sharing.
Perhaps the best news for workers who are bonus-eligible: many companies are moving toward paying out bonuses more frequently. Fewer organizations gave out annual bonuses last year (56 percent vs. 67 percent in 2016). However, 16 percent of orgs gave out bonuses on a quarterly basis, and 10 percent paid these incentives monthly.
The trend is expected to continue in 2018, with 17 percent of companies reporting that they’ll give quarterly bonuses and 10 percent forecasting monthly bonuses.
Will You Get a Bonus This Year?
Our research shows that companies are getting smarter about compensation: 46 percent of top-performing organizations said they have a compensation strategy, while another 35 percent are working on developing one. The backbone of a good compensation plan, a compensation strategy helps organizations align their pay with business goals.
What does that mean for you? Well, depending on what you do, where you work and whether you’re a top performer, it might mean a bigger paycheck or a better bonus.
While average salary increases still hover around 3 percent, companies are more willing to reward top performers. Fifty-four percent said that they offered a bigger base pay increase for their best workers in 2017, while 35 percent gave bonuses and 27 percent gave goal-based incentives or bonuses.
You’re also more likely to get a bonus if you work for a larger company rather than a smaller one. Large or enterprise-level employers were more likely than small or medium-sized orgs to report giving nearly every type of variable pay, including individual incentive, hiring, referral and spot bonuses.
Finally, if you can’t get a bonus where you are, it’s worth considering a job change. Thirty-four percent of respondents to PayScale’s Compensation Best Practices Survey said that they offered hiring bonuses to bring in new talent. Unemployment is currently at a 17-year low. If your skills are in demand, there’s no better time to start looking.
To learn more about variable pay and your chances of getting a bonus this year, read PayScale’s Compensation Best Practices Report.
Tell Us What You Think
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