The number of employers offering holiday or annual bonuses is falling

Now that we’re at the end of the year, it’s a good moment to check in on a specific form of compensation available to some workers: holiday bonuses. That extra check that some people get if their company is doing particularly well, or to say thanks for working through a tough season.

Jadrian Wooten at Virginia Tech started wondering about bonuses after watching his favorite Christmas movie.

“Every year I watch ‘National Lampoon's Christmas Vacation,’” he said.

He got to the part where an envelope arrives for Chevy Chase’s character Clark …

“I started wondering just how many people actually got that,” Wooten said.

He looked into the Bureau of Labor Statistics data and saw about half of all workers in the private sector have access to some sort of “nonproduction bonus.”

Though he said the percentage of workers who get these checks really depends on the industry. For example, there’s what BLS calls “end of year bonuses,” which are sometimes tied to company performance.

“It really is what we would consider sort of white-collar professions, so finance and insurance, scientific, technical, IT,” Wooten said.

As for holiday bonuses… 

“Those were much more likely to be in kind of blue-collar industry,” he said. “So, construction had a lot of that. Real estate and manufacturing were much higher, but retail trade was actually the highest one.”

While not every company that gives out a bonus advertises it, Laura Ullrich at the Indeed Hiring Lab said she’s seen a trend in job listings

“This time last year, 1.65% of all job postings in the United States either had the term year-end bonus or annual bonus in the job posting. And this year, it's only .74%,” she said.

The payroll company ADP recently looked at bonuses too and found the percentage of employees receiving them has been falling since a peak around 44% in 2021.

Rakoon Piyanontalee at Penn State’s School of Labor Employment Relations said these trends make sense, especially after the pandemic and Great Resignation.

“The labor shortage drove companies to offer bonuses, among other things, to try to retain workers. But that was a few years ago,” he said.

And with today’s more stagnant labor market, he said employers may just have less incentive to pay more to retain employees right now.