According to research by Zest, as many as 60% of employees aren’t expecting a Christmas bonus this year, with just 8% hopeful for a higher payout. Adding to the uncertainty, 44% of workers don’t foresee a pay rise in 2024, a sentiment fuelled by the recent rise in employers’ national insurance contributions outlined in the UK chancellor’s budget.
This negative sentiment isn’t without cause. Wage growth has already slowed, with just 43% of workers saying they received the pay increase they anticipated this year. The report warns that failing to offer meaningful financial rewards or incentives could harm employee morale, reduce productivity, and risk talent attrition. Employers must find alternative ways to motivate and reward their teams beyond salary adjustments.
“After yet another tough year, many employees appear resigned to not receiving the financial rewards they’re looking for from their employer. If pay stagnates or organisations are unable to offer bonuses, they must ensure they are finding alternative ways to reward employees or they risk falling behind competitors. Employee benefits packages offer a cost-effective approach for employers to reward employees without salary hikes and ensure they continue to attract and retain key talent,” said Matt Russell, CEO of Zest.
Furthermore, the study highlights a preference for benefits over bonuses. Among employees still in line for a Christmas bonus, 71% say they would rather receive better employee benefits. Younger employees, mainly those aged 18-34, show an even stronger inclination, with 80% favouring benefits over cash rewards.
In addition, long-term financial support is also gaining prominence, as nearly 57% of surveyed believe funds typically allocated for holiday celebrations would be better spent enhancing their benefits packages.
This sentiment echoes Zest’s earlier findings, where 63% of workers said benefits play a crucial role in deciding where to work. However, 41% of employees feel their current benefits offerings fall short of expectations.