March 2001

Keep ‘Em If You Got ‘Em

The economic slowdown is not breaking news to anyone. Will this downturn change the job market conditions? Not likely. Companies will need to cut the excess and rigorously watch the bottom line, but in regard to the key talent the labor market remains tight and shows no signs of significant decrease. The highly skilled workers even more than before, will feel the need to pursue their best interests and react as a free agent. Company loyalty will be an ever-decreasing element in the downsizing frenzy. It is now even more important to retain those individuals that will lead the way for the survivors to strengthen and maneuver through the current economic downturn.

In the 2^nd annual Retention Bonus Survey conducted by WorldatWork, 550 total rewards professionals confirmed that companies are reacting. In one year alone, 45 percent of the companies (within the same survey panel as the prior year) have implemented retention bonus programs. And 25 percent of the respondents that currently do not have a retention bonus program are considering implementing one.

The key findings the survey also produced:

• 45 percent of the participants have implemented a retention bonus program in the past year.
• The number of companies that have a retention bonus program (34 percent) increased 10 percent from 2000 to 2001.
• An average of 75 percent of the cash retention bonuses were paid out in a lump sum (not including nonexempt, part-time and contract workers) and that number was consistently high when looking at all of the demographic breakdowns.
• 56 percent of the respondents offer retention bonuses to upper management, an increase of 28 percent from the 2000.
• Information Technology employees lead the categories with 73 percent of companies including this group in the program.
• 31 percent tied a cash bonus to length of service, an increase from the previous year of 19 percent.

All Companies