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Companies curb holiday bonuses


Minneapolis
CNN

Last year, the bonuses were generous. This year, economic uncertainty is dampening the holiday advantage, according to survey data released Thursday by Challenger, Gray & Christmas.

More than 81% of 252 employers surveyed by the outplacement firm said they planned to freeze the value of holiday bonuses at the same level as last year, while a growing number of companies said that they would completely forgo a bounty.

Nearly 27% of companies surveyed said they would not give bonuses, up from 23% in 2021.

“We are clearly seeing some easing in the labor market,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, told CNN. “Companies are more concerned about an economic recession or slowdown coming in the next quarter or so, and you’re starting to see that show up in some of these indicators.”

In recent months, waves of major companies have announced mass layoffs, particularly in sectors like technology, media and real estate.

Overall, however, the labor market remains incredibly strong by historical standards: there have been far more vacancies than people to fill them, and employers who have spent months managing labor shortages workers have been reluctant to cut jobs.

“We have been in the tightest job market in modern American history. [with] lowest level of layoffs, highest wage increases, highest number of job offers, highest number of job abandonments,” Challenger said. “So as things get softer, inevitably layoffs are going to go up, bonuses are going to go down, wages are going to stop going up at about the same rate – and that’s if we have a soft landing. ”

The backdrop to the searing economic recovery has been a period of high inflation for decades, which the Federal Reserve has sought to bring down with a barrage of blockbuster interest rate hikes.

Efforts to reduce inflation have raised fears of a recessionary period.

“It seems less likely to be as good next year as it is this year, just because this year it’s been pretty damn good again,” Challenger said.

cnn World Gt

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