More than half of hiring managers are optimistic that their organization will award year-end bonuses this year, according to a September survey from the professional services firm Adecco. The report surveyed more than 1,150 hiring decision-makers across a variety of industries in the U.S. to gather compensation data at the end of an economically turbulent year, as well as gauge where leaders are feeling optimistic for 2021.
Just over 60% of respondents said workers at their organization can expect a year-end bonus; of those, over half believe the bonuses will be higher than they were last year, and a quarter believe the amounts will be lower in 2020.
Laura Schroeder, a consulting lead with the Adecco Group, tells CNBC Make It this positive bonus outlook was initially surprising, but says it is likely concentrated among companies that saw increased demands of their products and services during the pandemic.
Indeed, several major retailers including Amazon, Walmart and Target — who expect record online shopping activity this month — are offering workers holiday bonuses ahead of the busy season.
Hiring managers in accounting and finance were most likely to believe their organization will offer bonuses and that they will be higher than in previous years. Companies' finance departments played a huge role in keeping businesses afloat in 2020, Schroeder says, given all of the facets of the field, including financial assessments; forecasting and modeling; and boosting productivity by investing in technology efforts.
Nearly 8 in 10 hiring decision-makers say it's likely their company will offer merit increases this year, but nearly half say the raises will be smaller than in previous years. Hiring managers who work in legal departments, as well as those at large employers, are statistically most likely to believe their company will award raises in the coming months.
Hiring managers are optimistic about rebounding economy
Employers say hiring freezes have been their primary cost-saving measure during the pandemic, followed by delaying promotions or raises, and then tightening benefits offerings.
However, many organizations across industries have taken more drastic measures to cut costs that could take months, if not years, to recover. One recent MagnifyMoney survey found that roughly 1 in 3 workers experienced a pandemic-related pay cut, and half still have not had their pay restored. The U.S. market has still not recovered 10 million jobs lost to the coronavirus recession, and the share of people experiencing long-term unemployment is rising.
Hiring managers are optimistic the labor force will slowly recover in the new year. According to the Adecco survey, about two-thirds of employers who furloughed or laid off employees during the Covid-19 pandemic say they will back-fill their roles, with the majority of them expecting to do so within a year.
Of course, some organizations have grown by leaps and bounds during the pandemic, particularly those in industries essential to social-distancing such as e-commerce and transportation. Roughly 17% of hiring managers overall believe that a new hire today will be able to command a higher wage than someone hired into the role before the pandemic.
Some of this may reflect greater support for raising the federal minimum wage, which sits at $7.25 per hour, and companies may be preparing for new legislation under the Biden administration. Target and Best Buy permanently raised their minimum wage to $15 an hour this year, and Florida residents voted to raise the state's income floor to $15 per hour by 2026.
Finally, as organizations shifted their priorities during the pandemic, many leaders noted that a number of soft skills became essential for workers and the business to succeed. Hiring managers pointed to adaptability and creativity (45%); critical thinking and problem solving (41%); and financial management (40%) as the top employee skills they leaned on in order to weather the pandemic.
"The ability to be nimble during times of economic upheaval and change is the key to company survival," Schroeder says. "Having employees that can pivot and respond quickly to the market and business conditions is also critical. The ability to adopt technology in record time to minimize business disruption is a trend we will likely see for the long term."