Quitting? Boss may offer you pay-to-stay bonus
Is your boss not acknowledging your hard work or he seems to be in oblivion and comes out as indifferent if you talk about your achievements?
If they're stretched to maintain a tight budget, no boss would happily give an increment or bonus to an employee, but they will be smart enough to persuade you to stay if you happen to be an important member of the team and your work does matter even if you believe it is not recongnised at the right time.
One of the ways to keep an employee from jumping the bandwagon is a whole lot of promises showing a floral, promising or whatever you may call…nice fancy pictures of the future. But when all the candies and pep talk fail to keep the motivation high and cannot hold back the impeding resignation letter being handed out to the HR, smart employers will go ahead and offer what is called pay-to-stay schemes or retention bonuses.
Such bonuses often dissuade the employees from walking out. And, yes, if you are in the UAE, you may also get a retention bonus if you go to the boss with your resignation letter in hand.
“Sign on bonuses were very popular in 2007/2008 but now employers are providing retention bonuses to keep good employees with them,” says Ash Athawale, Recruitment Manager at Reed Specialist Recruitment.
“As the market has re-emerged from a recession, employers are becoming more wary about keeping their employees happy and content in their jobs. Employers are coming up with innovative ways and locking down employees with retention bonuses, which are paid out the longer they stay with the company. These bonuses are given to their top performers and are tied to an anniversary date,” explains the Reed expert.
Previous surveys carried out by recruitment firm Robert Half show that employers are trying to keep their people happy in order to retain them. “More than one third of UAE executives cite a rise of counteroffers in efforts to retain key employees,” Gareth El Mettouri, Associate Director at Robert Half told Emirates 24|7.
It makes sense to give a bonus to somebody who has performed and is a better HR tool than giving an amount to a candidate who has just joined the company. “Employers, who, in the boom time paid sign on bonuses with no guarantees, are now paying bonuses, which need to be paid back should the employee leave within the first year,” says Athawale.
“Employers are now tying down employees with ‘back loaded’ bonuses. In simple terms, the longer the employee stays the higher the bonuses gets. For example, an employer decides to pay Dh200,000 over a three year period. The employee can get Dh50,000 at the end of year one, Dh60,000 at the end of year two and then Dh90,000 at the end of year three,” he explained.
However, there are experts in the industry who believe this kind of bonus is not very prevalent in the country.
“This bonus is paid only to very senior employees in critical roles when there is scarcity of that particular skill or experience,” says Hasnain Qazi, Middle East Business Manager at Huxley Associates.
Graham Whitworth, Senior Banking Consultant at Charterhouse Partnership stresses that such pay-to-stay schemes are not prevalent in the country.
“They are not popular and there are no signs that this practice is on the rise. There is a common misconception that by paying more you can retain employees for longer. Retention is something that can be planned by providing employee’s career development, new challenges and a good working environment. Retention is not something you can throw money at,” he emphasizes.
Whatever the case may be - but buyer beware - this is being given to you to remain loyal for the time being, not trying to influence your performance.
Retention bonuses only treat the symptoms but the problem persists with time. One problem is that, though the employee may stay for the time being, her/his loyalty will always be questionable. Engagement cannot be bought definitely, as Whitworth tried to explain. “It boils down to fulfillment and this does not have a price tag attached to it,” said the HR manager of a multinational bank on the condition of anonymity.
“While candidates may end up securing higher remuneration in the short run, the company will often question their loyalty and later overlook them for future promotion. Generally, the individual would end up leaving when another opportunity presents itself. These retention bonuses vary by industry and are generally reserved for senior management,” concludes Mettouri, of Robert Half.
In a nutshell, only hand in your papers if you have a concrete counter-offer in hand. Looking for short-term gain but long-term pain is at your own risk.
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