Fall in Christmas bonuses expected this festive season

After a tough year, only 8% of employees are expecting a larger Christmas bonus this year with 60% admitting they aren’t expecting a Christmas bonus at all.

With the new year approaching, it seems that many employees aren’t hopeful for their prospects of improved financial rewards next year either – over four in ten (44%) employees aren’t expecting a pay rise in 2025.

Beyond slashing Christmas bonuses, employers have been cutting back on pay rises through 2024 as just two fifths (43%) of employees received the pay rise they were expecting this year.

Given financial pressures and stagnating pay, employers are increasingly embracing new ways to reward employees beyond salary so they stay competitive.

Benefits packages are becoming an increasingly popular way for companies to attract and retain key talent for their business. With employees increasingly favouring benefits packages to improve morale and increase their productivity.

Benefit packages offer a cost-effective solution to reward staff and are also popular with employees – seven in ten (71%) employees who will be getting a Christmas bonus would prefer a better benefits package instead of a Christmas bonus this year.

Our research show that benefits packages are becoming especially popular amongst younger workers in particular, with 80% of employees aged 18-34 prioritising benefits over bonuses.

The importance of workplace benefits packages to employees is clear – two-thirds (63%) say that benefits in the workplace have become more important to them when deciding where to work.

With two in five (41%) employees unsatisfied with their current benefit package, employers may wish to consider whether the budget for their Christmas party would be better spent on their employee benefit package.

After all, nearly six in ten (57%) employees would prefer the longer-term financial support of a benefits package over a Christmas party.

However, employers decide to use Christmas budgets or reward employees this year is vital that they communicate with individuals across the organisation and understand their demands and needs. Those who manage this effectively are likely to not only increase morale but also productivity and employee retention in the new year.

Research conducted by independent research agency Opinium which surveyed 2,000 adults weighted to be nationally representative between 22^nd – 26^th November 2024.