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The stock market is up — and so are annual bonuses for Wall Streeters, with New York state Comptroller Thomas DiNapoli estimating that the average bonus is on track to reach $143,462, up from $138,210 in 2016.
Yet while bottles of Dom Perignon are surely popping across the financial sector, the rest of the nation's employees may be enjoying something closer to lumps of coal. Although some companies have responded to the nation's brand new tax bill with promises of bonuses, a recent survey by Challenger, Gray & Christmas estimates that just 39 percent of companies will be doling out cash this year.
How did this working person's staple become an increasingly rare luxury?
The beginning of the end for the annual cash bonus came about almost a decade ago, when the great recession hit.
“When things got tight, the first thing to go were bonuses,” Vicki Salemi, a career expert for Monster.com, told NBC News. “The priority was to keep employees and to not cut headcount or salary.”
Companies may be in substantially more prosperous positions today than they were this time 10 years ago, but outside of Wall Street, the psychological wounds of the financial crisis haven’t healed. Bosses may be keeping a tight grip on their purse strings because they’re not so trusting that things will remain this flush forever.
“Though things have greatly improved, I don’t think we’ve gotten to where we were pre-recession,” said Salemi. “The mindset has changed.”
But let’s not chalk it all up to cases of CEO PTSD; the unwillingness to give a monetary bonus is also, in some cases, a matter of convenient stinginess. Why give employees a cushy bonus if they’ll remain loyal without it? This may be especially true of Gen-Xers and boomers, famously less willing to jump jobs.
“The employee mindset may be, ‘well at least I have a job,’” said Salemi. “It's an unhealthy way of thinking and an interesting conundrum when you think of employee recognition and appreciation. Honestly, it's surprising because we’re in a tight labor market and monetary bonuses are a great retention tool to keep employees engaged through the new year.”
Gift cards, gift baskets, or personal time
Salemi notes that increasingly companies are handing out more modest rewards like gift cards and gift baskets. This is looking to be particularly true in the case of small businesses. According to the Bank of America Small Business Report, the majority of smaller companies will show some kind of recognition, however token-like.
“Overall, 76 percent of business owners are offering some type of holiday perk, whether that be holiday parties, time off, flexible hours, or personal gifts,” said Sharon Miller, managing director, head of small business at Bank of America.
Holiday parties may not be terribly desirable (a recent survey by Randstad US found that 90 percent of employees would rather get money or extra vacation days), but flexible hours and more paid time off have become hot commodities, especially among millennials — many of whom joined the workforce during and after the recession, and may have never personally known the glory days of cash bonuses for the masses.
“Workers may want other kinds of benefits,” said Cheryl Carleton, assistant professor of economics at Villanova School of Business. “Flexible hours, telecommuting, onsite childcare, and other perks. If you only have so much of a pool for compensation, you have to prioritize, and people are showing that they do like these things.”
Meaning over money
More and more CEOs are putting thought into giving bonuses that will make a lasting positive impact — even if they won’t build up your bank account.
“Many of our employees are passionate about giving back to our community, but it’s difficult to find time in their busy schedules to do so,” said Bret Bonnet, co-owner and founder of Quality Logo Products, which has 110 full-time employees. “As a way to reward them for their outstanding efforts during the work day, we’re allowing our employees to volunteer while on the clock. Groups of employees went to Feed My Starving Children and donated some of their work hours to packaging meals for children around the world. Not only was it a chance for our employees to give back, it was also an amazing team-bonding experience that brought us all closer together."
Martha Shaughnessy, founder of The Key PR, located in the Bay Area, is also looking to enable her seven staffers to give back after witnessing great devastation during the northern California wildfires. Employees will deliver monetary and toy donations to community organizers.
“This year, we have seen so many people lose everything. Spending feels hollow. We are transparent with the team about compensation and ensure their needs are met, and all decided together that spending time really engaged with each other is the best gift,” she told NBC News.
And even though the economy is robust, there are still plenty of companies, particularly young ones, working on tight budgets. They may be doing the best with what they have, and making inexpensive but elaborate plans to show their employees they’re appreciated.
“As a startup we are very limited on funds, but we feel that keeping our employees and contractors happy is of the utmost importance,” says Mark Lubin, co-founder and CEO of the app Homies. “My co-founder and I typically come up with some ideas of what we think our employees would like, and then comparison shop the different items taking into account which ones we think our employees will like the most. This year we have some new people with new interests. One of our consultants writes a food blog on the side, and loves trying new restaurants, so for part of her Christmas gift we are taking her out for dinner at a restaurant of her choice that she can blog about and use for her other business.”
Also keen on connecting with employees on a more meaningful level is Acceleration Partners, which is thinking outside the bonus box for its 10th anniversary this year.
“I asked employees to share their top five personal dreams/goals/ambitions in an email,” said Bob Glazer, founder and managing director of Acceleration Partners. “I selected 10 recurring themes from the goals employees shared and set out to make them come true.” Personal trainers, a trip to Denmark, and flying lessons are just a few of the customized bonuses Acceleration Partners employees will be receiving this year. “No one remembers a cash bonus from five to 10 years ago, [but] I still remember a trip I was given seven years ago for me and my wife: It was a life memory,” added Glazer.
Non-monetary bonuses may not pay our mortgage or quell our student loan debt, but they do provide opportunities for bosses to show us that we are valued. And even though Wall Streeters are raking it in, it’s important to have some perspective: A bullish economy doesn’t mean that certain industries aren’t hurting.
“In the economy overall, there's a divergence,” said Carleton. “At the top there’s Wall Street, and I think they'll continue to get big bonuses if there's not another great recession. On the bottom part of occupational distribution, with lower level jobs, these bonuses will become less and less likely. There’s too much pressure to keep prices low. You also have more and more people who are [a part of the gig economy] working for Uber or TaskRabbit, or doing contracted work. In these cases, it’s not like you’re working for one company who wants to keep you.”