A new Effective Compensation Survey Report found that 86% of employees would take an extra cash bonus in exchange for time commitment at one company. Will yours?
In addition, of those respondents who receive stock options or other equity, 76% say they would rather receive all or a portion of that equity as cash today in exchange for a time commitment. As companies look beyond traditional compensation for creative ways to recruit and retain employees, survey research shows that cash is preferred.
The survey report comes from an online poll by Keep Financial in Dec. 2022 of 1,027 full-time US employees, ages 18 and up. Respondents work across various industries, including finance, healthcare, technology, education, retail, government, and manufacturing.
“The survey shows us that cash is king for employees – and comes right as many companies seek to revamp compensation and retention strategies,” said Rob Frohwein, Keep Financial co-founder and CEO in a news release. “However, for employers to be effective in meeting employees’ needs, they must also ensure that the corporate object of retention is met. Keep ensures that outcome.”
Today’s employers have the opportunity to offer innovative compensation packages that deliver retention of top employees while helping them reach both short and long-term financial goals. The report explores how employees would view a lump sum cash bonus tied to retention, how they would use that cash and how it compares to other incentives, such as stock options or other equity.
Key Survey Findings Include:
- Cash is king – 86% of respondents would take an extra lump sum cash bonus in exchange for agreeing to stay with their company for a specific period.
- Paying off debt is a priority – When asked how they would use a lump sum cash bonus payment, respondents listed paying off debt (44%), saving for retirement (40%), starting an emergency fund (28%), and saving for a down payment on a home (21%) as the priorities.
- Cash preferred over stock options – 33% of respondents say they receive stock options or other equity as part of their compensation. But of those receiving equity, 76% said they would rather receive all or a portion of that as a lump sum of cash today in exchange for staying at the company for a certain period.
The desirability of Cash Bonuses
The results prove that upfront cash bonuses are a desirable benefit that can give companies a competitive edge when recruiting or retaining key employees. This feedback comes at a critical time, as McKinsey found that people voluntarily leave their jobs at a 25% higher rate than pre-pandemic. In today’s competitive market, employers must listen to the needs of the workforce and focus on offering flexible compensation plans designed to help employees achieve their personal financial goals.
“Compensation options have been static for decades. As employees increasingly grapple with student debt, increasing housing costs, and inflation, companies have an opportunity to get cash-creative to help employees grow their net worth while ensuring they retain their best workers to boost productivity and the bottom line,” Frohwein said.
Download the full survey report here.
Source: Keep Financial