It’s not just the wind that is blowing cold across the UK this winter. Almost half of the professionals in the UK who would normally expect to receive an end-of-year bonus look set to be disappointed this year as employers tighten their belts amid pressure to cut costs.
According to employers quizzed for the new Salary Survey guide from recruiter Robert Walters, 45% of staff will receive nothing in December or January, with reduced profit margins (36%), economic uncertainty (25%) and layoffs & workforce reductions (33%) the most commonly-cited reasons for not being able to give end-of-year bonuses.
“This year’s bonus outlook reflects the economic pressures that many businesses are facing, with nearly half of professionals missing out on end-of-year bonuses—a trend we haven’t seen since the year of lockdowns or the financial crash,” said Chris Eldridge, CEO of Robert Walters UK & Ireland. “It’s a challenging reality for employees who, in many cases, remain optimistic about their performance and value to the company.”
But with three-quarters (78%) of UK professionals ranking bonus schemes as the most important workplace perk (more than pension contributions, equity or commissions), cutting bonuses entirely is not without risks.
According to the poll, four out of 10 (41%) of professionals would ‘take steps to leave’ in the new year if they aren’t given their anticipated pay rise, bonus or promotion, while a third (32%) stated that they would be willing to ‘move for the same amount of money’. A further thirds would even ‘take less’ if their new organisation gave them more purpose, recognition for their work, or greater flexibility.
Managers are equally concerned about the knock-on effect of a bonus freeze, with four out of 10 (40%) concerned that it could result in a spike in staff turnover in the first part of 2025 – similar to what was seen in 2021 labelled ‘The Great Resignation.’
“For employers, clear communication is key. Misaligned expectations between professionals and their organisations can lead to disengagement and retention issues, especially at a time when attracting and keeping top talent is already a challenge,” Chris Eldridge added.
“Employers need to recognize that withholding bonuses or promotions could lead to an erosion of trust and commitment, which, in turn, could fuel a wave of resignations. For businesses, offering financial rewards may not always be feasible, but fostering a culture of transparency, purpose, and flexibility has never been more critical to retaining top talent."