By Rocio Fabbro
Holiday payouts are few and far between for 2023 as an uncertain 2024 looms. Thirty-four percent of employers will not give out any bonuses this year, up from 27% in 2022, according to the Annual Challenger Year-End Survey by Challenger, Gray & Christmas published Monday.
That’s the highest number of companies to announce lower payouts since 2019, when 36% opted not to give bonuses.
Of those companies that do give employees year-end rewards, 15% of said they are lowering the value of the bonus, the online survey showed. It was based on a November poll of 202 U.S companies of various sizes and industries.
Instead, almost a quarter of companies plan to award a non-monetary or nominal award, such as a gift basket or extra vacation day, and even this figure is down from 29% last year and 35% in 2021.
“Companies’ year-end plans are reflecting the position that 2024 will bring slower growth,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in a statement accompanying the report. “With companies slower to hire and workers more likely to stay in their jobs, companies are cutting where they can. Attracting and retaining workers is not as high a priority as it was in 2021 and 2022.”
After 2023’s tight job market, the labor market is showing clear signs of cooling, with fewer job openings and less overall hiring.
Job cuts across multiple industries have spiked this year. U.S.-based firms let go of 45,510 employees in November, a 24% jump from October, according to another Challenger, Gray & Christmas report published earlier this month. In 2023 so far, companies have announced plans to cut nearly 700,000 jobs, more than double the same period last year, the outplacement and executive coaching firm found.
This follows on the heels of pandemic-era hiring booms in several industries, particularly at tech-based companies. In the last two years, however, the tech sector has seen more than 400,000 layoffs as firms re-evaluate their strategies and seek to bring down costs.
While Wall Street hasn’t suffered significant cuts, routine layoffs and hiring freezes were not unheard of. Still, bonuses look to be quite a bit smaller this year.
A report published last month by Johnson Associates found that investment bankers advising mergers and acquisitions could see their annual bonuses fall by 15% to 25% compared with last year. Meanwhile, regional banks are giving their loan officers, commercial bankers and other executives bonuses that are 10% to 20% smaller than in 2022.
Wall Street bonuses paid to securities employees last year fell 26% to $176,700 from the highs of $240,000 they reached in 2021, according to New York State Comptroller Thomas DiNapoli’s annual estimate.
Alan Johnson, president of the consulting firm, said the financial industry will likely have to wait until 2024 for a rebound in bonuses — assuming companies can turn their falling profits around amid slowing consumer spending and increasing geopolitical challenges.
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
