Close to nine in 10 Hong Kong-based employees (87 percent) are expecting to receive a bonus this year. Out of which, 73 percent of the respondents said that they are anticipating an annual bonus of up to two months.
Natellie Sun, Managing Director of Randstad Hong Kong said, “There is no hard-and-fast rule as to how much bonus payout should be. Employees will always expect more for their loyalty and the time and energy that they have spent in the organization. Therefore, it is the employer’s responsibility to manage expectations by having transparent discussions with their staff about the company’s profitability and individual performance.”
Bonuses not essential for employee retention
While almost all of the survey respondents (97 percent) agreed that receiving a bonus is important to their engagement with the company, 57 percent said that it is not the only factor that will make them start considering the possibility of a job change.
“The workforce in Hong Kong is very motivated by financial remuneration. Therefore, they are more attracted to companies that offer a high salary and known for giving big bonuses. However, when it comes to leaving for another employer, people tend to consider a number of factors beyond salary or bonus such as development opportunities, culture and workplace flexibility.
Needless to say, four in 10 respondents said that they will start a new job search if they do not receive a bonus this year, with a majority of these respondents working in the banking and financial services industry (38 percent).
Unaligned bonus expectations
Hong Kong-based companies plan to share profits with their staff this year in an effort to boost employee engagement and improve retention.
Eighty-five percent of the companies surveyed have planned for a bonus payout this year. Of which, 77 percent are prepared to reward their staff with a bonus between one to two months.
While 22 percent of the employees surveyed are expecting an annual bonus averaging three to five months, only eight percent of employers indicated they would pay out three to five months bonuses. This misalignment in expectations could lead to higher attrition than anticipated in the coming months.
Tiered bonuses more widely-practiced in Hong Kong
The survey found that 56 percent of the organizations in Hong Kong practice tiered-bonuses. Unlike a flat-bonus scheme where all employees within the company receive the same amount of bonus regardless of their performance and job scope, a tiered-bonus scheme rewards employees based on their performance and scope of responsibility.
“A tiered-bonus scheme not only rewards good performers, but it also helps motivate and incentivize employees to certain milestones and work towards surpassing their goals and targets. Companies that practice tiered-bonus structure tend to have a more flexible budget which is highly dependable on the organization’s profit. However, companies will also reduce the bonus budget when the company does not perform as well. As a result, employees are more driven to perform better so that they can receive more bonus at the end of the year.” Sun expressed.