As hiring concerns continue to soar, Human Resource management is challenged to retain current key employees. To ease the revolving door syndrome, companies are identifying positions where turnover would be a hardship to the organization. Many are also implementing retention programs for critical project completion and longevity awards.
A recent e-mail survey conducted by WorldatWork queried more than 650 members regarding their cash retention bonus programs. Many participants said they are considering implementing more retention programs beyond the Y2K IT bonus. A significant number of companies specified use of a retention bonus while going through mergers, acquisitions and closures to ease them through the transition period. The survey also revealed:
24% of the participants currently have Retention Bonus programs in place. That number rose to almost 30% when excluding the Clerical and Other Staff categories.
25% of those having programs tied the bonus pay out to a project completion.
75% of the surveyed companies paid bonuses in a lump sum cash award.
35% of the participants calculated the retention bonus as a percent of base pay.
On average, 30% of the companies paid an actual dollar amount of more than10% of the employees base salary.
Question 1.
Does your company award cash retention bonuses to the following categories of employees:
Yes
No
Upper Mgmt.
28%
72%
Middle Mgmt.
29%
71%
Supervisors
22%
78%
Professional Staff
32%
68%
Technical Staff
35%
65%
Clerical Staff
10%
90%
Other Staff
11%
89%
Average
24%
76%
Question 2.
Is the cash retention bonus tied to length of service?
Yes
No
Upper Mgmt.
11%
89%
Middle Mgmt.
14%
86%
Supervisors
10%
90%
Professional Staff
15%
85%
Technical Staff
18%
82%
Clerical Staff
6%
94%
Other Staff
7%
93%
Average
12%
88%
Question 3.
At what point does the cash retention bonus pay out?
1 Year or <
After Year 1
Project Completion
Other Milestone
Other
Upper Mgmt.
14%
15%
19%
12%
41%
Middle Mgmt.
17%
14%
24%
15%
30%
Supervisors
15%
10%
28%
13%
34%
Professional Staff
16%
14%
28%
10%
32%
Technical Staff
15%
10%
34%
11%
30%
Clerical Staff
14%
10%
20%
10%
46%
Other Staff
13%
12%
22%
13%
40%
Average
15%
12%
25%
12%
36%
Question 4.
What type of payment method is used for the cash retention bonus?
Lump sum
Increase to base
Combination
Other
Upper Mgmt
73%
5%
11%
12%
Middle Mgmt
77%
3%
12%
8%
Supervisors
77%
4%
10%
8%
Professional Staff
77%
5%
11%
7%
Technical Staff
80%
5%
9%
6%
Clerical Staff
72%
6%
4%
18%
Other Staff
71%
7%
7%
15%
Average
75%
5%
9%
11%
Question 5.
When the cash retention bonus is calculated, what is it based on?
Flat Dollar Amount
% of base pay
Combination
Upper Mgmt.
41%
34%
25%
Middle Mgmt.
41%
34%
25%
Supervisors
41%
36%
23%
Professional Staff
48%
32%
21%
Technical Staff
47%
33%
21%
Clerical Staff
37%
36%
27%
Other Staff
39%
39%
22%
Average
42%
35%
23%
Question 6.
What is the actual dollar amount, on average, as a percent of base pay?
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