Employee retention has become a growing concern among companies as they compete for talent in today’s competitive job market.

In view of this issue, JobStreet.com recently conducted a survey to gauge the correlation between bonuses and employee retention.

A total of 3, 858 employees who participated in the survey were asked, “Do bonuses contribute to your retention?” A significant 75% of them said that bonuses play a crucial role towards their retention.

They also indicated that their current bonus scheme is one of the primary reasons why they would opt to stay put within their companies, and given the chance they would leave for better paying positions.

However, when the employers were asked if bonuses contribute to employee retention, only 37% said it’s a major factor in making employees stay with their companies.

This shows that there is a large gap between the perception employees and employers on the subject of bonuses.

Meanwhile, 56% of employees who took part in the survey expect their year-end bonuses to be higher than they were a year ago, up by 5% compared to a similar survey done last year.

As to why these employees expect a bonus increase, 57% believe that they have fulfilled their management’s expectations in terms of work performance, 35% attributed it to their organisation’s higher business profits and 8% said it was due to a decrease in operation costs and overheads compared to last year.

Why Are Employees Expecting A Bigger Bonus?

Twenty-six percent of the respondents expect their bonuses to remain the same and 18% expect a lesser bonus. Out of those who are anticipating a lower bonus, the majority of them said it’s because their organisations are seeing a decline in business profits in comparison to the previous year.

The survey results also revealed that 55% of employees expect a salary increase above 6%.

However, only 27% of employers will be giving an increment that is equivalent, implying that a large number of employees will not be receiving their expected increments this year.

“As the cost of living increases, more employees are in search of opportunities that will help them cope with their current expenses. Employers must be willing to bridge the gap between their current payout schemes and employee needs.

"If employees feel valued and fairly compensated, they will be enthusiastic and committed to their jobs and will find no reason to leave,” said Chook Yuh Yng, Country Manager of JobStreet.com.