If you’re hoping your finances will get a boost from a year-end bonus, you may be in luck. New research suggests that many organizations will continue to offer employees end-of-the-year financial incentives and some will even increase the awarded amount this year.
Staffing firm Robert Half conducted two surveys to gauge the likelihood that employers would be offering year-end bonuses, and what employees expected to receive. In one survey they polled 2,800 senior managers at companies that have 20 or more employees, and in the other they questioned 2,800 adult workers (ages 18 and older) in office environments in 28 major cities across the country.
The findings suggest that bonuses are more the norm than the exception. In fact, 76% of senior managers said their firms offer year-end bonuses. Of those senior managers whose companies offer bonuses, nearly half (48%) said they expect their organizations to offer larger bonuses this year than last year. Another 48% said they expect company bonuses to remain the same, while just 4% said they believed bonuses would be smaller this year than last year.
How employees will spend their bonuses
While a majority of companies appear to offer bonuses, not all employees expect to be on the receiving end of them. The Robert Half data showed that 52% of workers said they expected to receive a bonus at the end of this year. Many are planning to use at least some of the extra money to improve their financial standing, though some responded that they would splurge a little:
- 52% said they would put it toward long-term savings
- 47% said they would use it to pay for a vacation in the new year
- 46% said they would use it for holiday shopping
- 46% said they would use it to pay off debt
The research also showed that it pays to live in certain areas of the country, as some regions had companies more likely to offer bonuses than others. Out of 28 cities surveyed, Nashville, Tenn., had the highest percentage (64%) of companies planning to increase their bonuses.
Nashville was followed by:
- Austin, Texas, where 63% of companies planned to increase year-end bonuses
- Denver and Minneapolis, where 59% of companies planned to increase year-end bonuses
- San Diego, where 58% of companies planned to increase year-end bonuses
- Portland, Ore., and Washington, D.C., where 57% of companies planned to increase year-end bonuses
When it comes to offering bonuses at all, the cities of Dallas, Miami and Houston had the largest number of organizations to issue year-end financial incentives to employees.
A year-end bonus is a great way to start the new year off on good financial footing. While it can be tempting to spend the extra money on holiday shopping or gratifying activities for yourself, you may be able to make a bigger impact on your quality of life by using the money to pay down credit card debt or increase your savings. If you’re planning to buy a house next year, a bonus could go a long way toward building up your down payment.