Year-End Bonuses See a Boost: A Sign of a Strong Economy
As the year came to a close, employers showed their appreciation for their employees’ hard work by doling out bigger year-end bonuses. According to a recent report, the average bonus awarded in December was $2,503, a 2% increase from 2023.
A Significant Amount of Money
Gusto’s senior economist, Nich Tremper, notes that this amount is equivalent to about one paycheck, making it a substantial sum, especially during the holiday season. This increase is a testament to the economy’s strength, with small businesses taking advantage of the growth to reward their employees.
Industry Variations
However, bonuses varied significantly across different industries. White-collar industries such as communications, technology, and professional services saw a notable increase in year-end bonuses. On the other hand, service industry workers received smaller bonuses compared to the previous year.
Small Business Optimism
Adam Beasley, owner of Adam Up Accounting firm, attributes the increase in bonuses to his company’s 8% growth in 2024. He remains optimistic about 2025, citing the continued demand for infrastructure work in the blue-collar sector.
Jobs Market Remains Strong
Despite some declines in certain sectors, the jobs market remained robust throughout 2024. Employment grew each month, and the unemployment rate edged down to 4.1% in December. Average hourly earnings also saw a 0.3% increase.
Bonuses as a Competitive Tool
In a tight labor market, employers are using bonuses as a way to retain top performers. While the share of workers receiving a bonus declined by almost 2% in 2024, companies are recognizing the importance of remaining competitive.
What Workers Want
According to Michelle Reisdorf, district president at Robert Half, bonuses are a key perk that employees consider when deciding whether to stay in a job or look for a new one. However, priorities have shifted since the pandemic, with workers now placing greater emphasis on work-life balance, flexible hours, and mental health support.
The Future of Work
As the job market continues to evolve, employers will need to adapt to changing employee priorities. With flexibility emerging as a top concern, companies may need to rethink their approach to benefits and compensation.
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