Last year, bonuses were bountiful. This year, economic uncertainty is bringing a chill to the holiday-season perk, according to survey data released Thursday by Challenger, Gray & Christmas.
More than 81% of the 252 employers surveyed by the outplacement firm said they planned to freeze the value of holiday bonuses at the same level of last year, while a growing number of companies said they would forgo a bonus altogether.
Nearly 27% of companies surveyed said they wouldn’t give a bonus, which is up from 23% in 2021.
“We’re clearly seeing some softening in the labor market,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, told CNN. “Companies are more concerned about an economic recession or a 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 large firms have announced mass layoffs, especially in industries like technology, media and real estate.
Overall, however, the labor market still remains incredibly strong by historical standards: There have been far more positions available than people to fill them and employers who spent months navigating worker shortages have been hesitant to cut jobs.
“We’ve been in the tightest labor market in modern American history [with] the lowest level of layoffs, the highest wage increases, the highest number of job openings, the highest number of jobs quit,” Challenger said. “So as things soften, inevitably, layoffs are going to increase, bonuses are going to go down, wages will stop rising at quite the same pace – and that’s if we have a nice, soft landing.”
The backdrop of the surging economic recovery has been a period of decades-high inflation, which the Federal Reserve has sought to bring down with a barrage of blockbuster interest rate hikes.
The efforts to lower inflation have raised concerns that a recessionary period may be ahead.
“It feels less likely it’s going to be as good next year as it was this year, just because this year, it’s still been pretty darn good,” Challenger said.