Jason Hanold, CEO and Co-Managing Partner of Hanold Associates, discusses how to navigate the tricky waters of Bonus Season and it’s effect on executive recruiting.
Companies look at year-end bonus season, roughly December through when the books are closed in March, as a time to reward employees, especially if business was good for the year.
Pretty simple, right? Employers feel good about sharing the wealth with their top performers and the employees, in turn, are grateful and loyal.
Not really. In fact, the end of the calendar year is one of the best times to recruit top executives because bonuses are sometimes seen as too little and/or too late by employees. In turn, that inspires executives to start looking around and be receptive to conversations with recruiters.
Employers who are trying to keep executives on their team through what they think are generous bonuses need to understand what motivates that employee beyond money. One large bonus can’t make up for a year of a negative relations between an executive and the company.
However, for employers looking to find a new executive as the year winds down, this is an ideal time to reach executives who are reassessing both personal and professional goals and whether they want to remain with their current company. Sometimes that self-reflection is driven by an inadequate bonus.
Employers who are trying to fill an opening late in the year also have a couple other advantages:
- They can interview the future executive before the holidays and take comfort in identifying the person they anticipate bringing on board/announcing in Q1.
- If they time it right, they will hire the executive right after the bonus has been paid by the current company, negating the need to pay that employee a bonus for almost another year.
Companies need to have a comprehensive strategy for bonus season that ties into their goals for the company and their top employees. If they see a high-level executive as a vital cornerstone to their company for years to come, a goals-focused conversation as well as a generous check will go a long way toward keeping the employee in the fold.