According to a report, year-end bonus have increased, but not every worker is getting them!
After a year of steady job growth and rising wages, employers ended 2024 by awarding larger year-end bonus for workers, according to a report from human resource provider Gusto, which analyzed over 400,000 small- to medium-sized businesses. The data revealed that the average bonus in December was $2,503, up slightly from $2,447 in 2023 – an increase of about 2%.
“This is an economy that ended 2024 much better than expected and small businesses are taking advantage of that – that includes wages and compensation for the current employees”, said Gusto’s senior economist, Nich Tremper.
Bonuses Across Different Industries
Gusto’s data also highlighted that year-end bonus varied by sector. White-collar industries, such as communications, technology, and professional services, saw notable increases in bonuses.
In contrast, service industry workers, particularly in transportation and warehousing, experienced smaller bonuses. Reduced demand in these sectors led to significant declines, Tremper explained.
Adam Beasley, owner of Adam Up Accounting in Utah, explained he calculates bonuses for his employees based on profits from thr prior year. "We were up another 8% in 2024, so the bonus was bigger", he said.
Beasley, who works with many blue-collar clients like plumbers and electricians, observed that these sectors remain busy due to ongoing infrastructure projects. "A lot of them are doing well because there’s still a lot of work to get done", he added.
With a tight labor market, bonuses have become a key tool for retaining top talent. However, due to that, fewer companies gave bonuses to their entire workforce, according to Tremper. In 2024, the percentage of employees receiving a bonus fell by nearly 2% compared to the previous year.
Bonuses Aren't Everything
"The key thing is that companies need to remain competitive. Bonuses are that extra perk that employees look for when deciding whether to stay in a job or look for a new job", said Michelle Reisdorf, district president at Robert Half, a recruitment and staffing firm.
While financial incentives like bonuses remain a top priority for many workers, Reisdorf noted that employees’ preferences have evolved since the pandemic. Today, work-life balance, flexible schedules, and mental health support are just as important.
Flexible or hybrid work arrangements, additional paid time off, better health insurance options, and stronger retirement plans are among the benefits employees increasingly value. "The key one is flexibility", Reisdorf added.