Work bonuses took a dive in 2023, Bloomberg reported Jan. 17.
The average cash bonus paid to employees in December dropped 21% from the year prior, according to a recent study of more than 300,000 businesses from payroll software company Gusto. In most industries, fewer workers received bonuses at all than in years past.
In the healthcare and social assistance industries — grouped into one category by Gusto — the average year-end bonuses declined 16% from 2022 to 2023, from $873 to $734.
Over the past two years, as inflation soared and workers led the Great Resignation, employers were more generous with bonuses, Liz Wilke, PhD, principal economist at Gusto, told Bloomberg. Now employees are less likely to quit, so employers are less likely to entice them to stay — especially since their compensation pools are draining.
"What surprised me was [the drop in year-end bonuses for] some of the industries where we've been talking about challenges finding talent, like food and beverage, health care and retail," Dr. Wilke said. "I didn't expect to see the magnitude of the declines in those sectors specifically."
The decline might be less surprising for healthcare CFOs, who have yet to see median hospital margins bounce back to pre-pandemic levels.