Where’s the rest?
If the end-of-year bonus you were banking on last month came in a little lighter than expected, you’re not alone: cash bonuses shrunk more than 20% in 2023 compared with the previous year, as small firm bosses in the US collectively tightened their purse strings while the job market normalized and inflation pinched.
According to new data from small business payroll platform Gusto, the average bonus slipped to $2,145 — a far cry from the $2,750 in Dec ‘22 and even further from the bumper $3,583 average recorded just before the pandemic. The share of workers who received a cash bonus at all was also down 2.7% from 2022.
Shrinking incentives
The cuts may not have come as a huge shock, with December polling from the WSJ suggesting that drop-offs were imminent. However, the scope of the pullbacks — with every industry tracked by Gusto reporting a decline in bonuses — was perhaps surprising.
End-of-year bonuses in both the tourism and transport industries shrunk 36% last year compared to 2022, a clear sign that the post-pandemic rush to lure workers back to those industries has weakened. At the other end of the spectrum, tech and finance workers found their payouts had held up better, with 2023 tech bonuses down just 4% to an average of $4,806 and finance workers still pocketing the most of any industry, despite a 12% decline: $13,255 on average.
