The Impact of Holiday Bonuses on Employee Retention
By Marta Gongos The yuletide season is the season of giving. For employers, it’s the season of giving holiday bonuses to employees. Incentives like these are a great tool for improving work culture, boosting employee morale, and enhancing employee retention.
A thoughtful bonus can make the hiring process easier by showcasing your company as a desirable place. Given employee turnover costs Canadian companies up to $100,000 annually—with high performers at risk—employers can’t afford to play around with maximizing employee satisfaction.
With the holiday season around the corner, there’s no better time to roll out your best incentives for employee retention. But if you’re still doubtful about the impact of holiday bonuses on your business, you’ve come to the right place. Read on to discover why extra incentives are the key to keeping talent (and your business) jolly this season!
What Are Holiday Bonuses?
Holiday bonuses are incentives given to employees at the end of the year or during the holiday season. These year-end bonuses usually come as a one-time payment or reward to celebrate employees’ hard work throughout the year. The type, amount, and even distribution methods depend on the company’s policies and budget, but usually come in the form of:
- Cash bonuses
- Gift cards
- Profit-sharing bonuses
- Physical gifts
- Paid time off or extra vacation days
Whichever way they come in, holiday bonuses aim to boost employee retention, engagement, and satisfaction. Let’s take a look at how that works!
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Benefits of Holiday Incentives for Employee Retention
Holiday bonuses for employees show you care, but they also have bigger business implications. Here’s how holiday incentives impact employee retention.
Boosts Employee Morale
The holiday season is when many workers reflect on their year and the effort they’ve put into their work. Receiving a holiday bonus during this period sends a powerful message: the company notices and values their contributions.
Recognition is a powerful motivator. So powerful that employees who don’t feel recognized become twice as likely to quit the following year. Top performers are particularly sensitive to recognition. They need to know that their efforts are seen and appreciated.
While recognition doesn’t necessarily have to come in cash benefits or gifts, offering holiday bonuses can be a great way to show your employees you recognize the hard work they do. It also creates a stronger bond between employees and the organization, a classic ingredient of employee loyalty.
Strengthens Loyalty
Recognition and rewards keep seven out of 10 employees loyal to their organization. Well-timed holiday bonuses are one of the best employee retention strategies.
But that’s not all. When employees feel valued, they tend to be more vocal advocates. When an employee becomes an advocate, they even trigger word-of-mouth marketing, which can boost the company’s reputation. Your company’s reputation can then do half the work to attract the talent you need on the team. Win-win!
Attracts Top Talent
People say, “Nobody wants to work anymore!” but the truth is nobody wants to work in places that don’t offer meaningful work and competitive compensation. Top talent in marketing and advertising know what they’re worth, and they won’t settle for anything less.
To keep employee retention high, start from the beginning of the employee journey—during the recruitment and onboarding phase. Benefits and incentives for employee retention, like holiday or cash bonuses, signal to potential hires that you value and invest in your entire team. Set the tone from the get-go to attract more candidates ready to commit long-term.
Enhances Work Culture
Company culture is the mother of employee retention. Employee job satisfaction, retention, engagement, and productivity depend on the work environment the company fosters. A strong company culture makes employees want to stick around.
Giving holiday bonuses can lift spirits and create a positive atmosphere in the workplace. Happy employees are more likely to spread that positivity around. When employees know they’re being rewarded, it can create unity and teamwork.
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Creative Incentives for Employee Engagement and Retention
Financial incentives aren’t the only way to show appreciation for the end-of-year/holiday season. Here are a few creative ideas you can try to help retain employees:
- Personalized Items. Non-cash gifts like custom gift baskets, high-quality notebooks, or branded merchandise can make employees feel valued without financial bonus payments.
- Experience-Based Bonuses. Give your employees the gift of memorable experiences with travel vouchers, event tickets, or subscriptions to services they’ll enjoy.
- Holiday Party. Give employees holiday bonuses via the party route. Host a virtual or in-person event to celebrate and bring everyone together.
- Performance Bonuses. Performance-based bonuses show employees you recognize both collective and personal contributions. Offer custom plaques, flat-rate cash bonuses, or other rewards tied to their performance or years of service.
- Flexible Working Arrangements. Allow employees the flexibility to adjust hours or work remotely during the holiday season to help reduce stress and manage work-life balance during crunch time.
- Professional Development Opportunities. Training courses, workshops, or industry event tickets are good incentives for employee retention regardless of season. Add them to your holiday bonus program to show you’re committed to investing in their career advancement.
- Extra Holiday. After the hectic season, show appreciation by giving your team a chance to rest and recharge. This way, they’ll return to work refreshed and motivated for the new year!
Unwrap Your Dream Team With Ad Culture
Holiday bonuses are a great tool for retaining employees, but it’s just the cherry on top. The best employee retention strategies begin with finding the right professionals committed to your company’s success.
Ad Culture is a recruitment agency specializing in marketing and advertising. We match businesses with the best talents in the industry, who align with your company’s values and culture. We take the time to understand your unique needs to ensure every hire is the perfect fit.
Let us help you find the unicorn that stays. Contact us today to unwrap your dream team!
