Careers: Aussies banking on a staff bonus are unlikely to see the payday

Big promises of cash bonuses to attract or retain staff at the start to 2022 are unlikely to materialise thanks to rising economic pressure on businesses. So, what are your rights?

Aussie workers banking on a staff bonus to help meet rising living costs may be left disappointed as inflationary measures prompt a last-minute change of mind by employers.

Big promises were made in a bid to retain workers late last year, with three in five bosses saying they were likely to award cash bonuses, says Andrew Hanson, NSW managing director at recruitment firm Robert Walters.

One in three workers was led to believe their bonus would be more than 10 per cent of their annual salary, Hanson says.

But rising inflation and interest rates, as well as a change in federal government and a volatile share market, has led to concerns that promised bonuses will fail to materialise, he says.

“I would not be surprised if there is disappointment over a bonus (not being received),” Hanson says.

“Businesses face a delicate balancing act in coming weeks, as bonus season unfolds within an increasingly uncertain recruitment market. There’s definitely a concern that companies are … developing a mindset of cost cutting to remain competitive or to keep cashflow positive.”

Andrew Hanson, NSW managing director at recruitment firm Robert Walters.

FACTORED IN

With some workers previously having been paid bonuses of up to 50 per cent of their base salary, the failure to receive a bonus this year will be devastating.

Human behaviour and performance specialist Christian Boucousis says many Australians have already budgeted on the cash injection to make ends meet.

“For many workers, a bonus isn’t really a bonus – it’s an expectation,” Boucousis says.

“Therefore, when these bonuses are not paid out, there can be huge blowback in morale, not to mention the financial stress a family will feel if they’re living right at the end of their means and they’ve factored in the expectation of a bonus. As the cost of owning our home increases by every measure, the loss of a bonus will bite particularly hard this year.”

Boucousis warns next year is likely to bring more disappointment, with interest rates set to rise further and consumer confidence levels currently matching those during the Global Financial Crisis and the early stages of the pandemic.

Those who work in construction, as well as some sectors within finance, will be particularly vulnerable, he says. “If a company is losing money and can’t pay the bills, the likelihood of your annual bonus is zero,” he says.

Employee Matters managing director Natasha Hawker says you should never count on a bonus until you get it.

WHAT CAN YOU DO?

Employee Matters managing director Natasha Hawker says there is little action workers can take if they do not get a bonus, even if employers have given a strong indication one would be received.

“When employees are facing financially difficult times, they will be hoping for miracles,” she says.

“But bonuses are never a certainty … (and) it is never a good idea to count on a bonus until you have received it.

“If the bonus is not in writing and the employer has decided not to pay it, it will not be easy for you to claim it.

“If the company is struggling, as many businesses are, no matter how much they would like to pay bonuses, they simply can’t afford to.’’

If an employer has committed to a bonus in writing, then Hawker says there may be some recourse and recommends workers contact the Fair Work Ombudsman for further advice.

Hawker suggests workers disappointed at not receiving a bonus consider their options – with some businesses offering sign-on bonuses, it may be financially advantageous for workers to move to a different role.

“The jobs market is very buoyant at the moment so many employees will have the chance to show their displeasure (over unpaid bonuses) by resigning,” she says.

If you were promised a cash bonus in writing, you may have some recourse if they renege.

GREAT EXPECTATIONS

Sixty per cent of bosses late last year said they were “very likely” or “likely” to award a bonus to staff. Just 3 per cent said they were “very unlikely” to give a bonus. Based on these expectations, workers were confident of expecting a sizeable bonus:

● Workers expecting a bonus between 1-5 per cent
of their base salary ............................................................................................20 per cent

● Between 6-10 per cent of base salary .......................................................... 47 per cent

● Between 11-15 per cent of base salary .......................................................10 per cent

● Between 16-20 per cent of base salary ........................................................ 8 per cent

●More than 20 per cent of base salary .......................................................... 15 per cent

Source: Robert Walters Salary Survey