March 27, 2001 (The Editor’s Desk is updated each business day.)

Size of workplaces and cost of bonuses

The cost per hour worked to employers for referral, hiring, and retention bonuses differs depending on the type of bonus and the number of workers in the establishment.

[Chart data—TXT]

Establishments with between 100 and 499 workers had the highest cost for referral bonuses in March 2000 at 14 cents per hour worked; in contrast, referral bonuses cost 4 cents per hour in establishments with under 100 employees and 6 cents per hour in establishments with 500 or more employees.

There was less variation by establishment size for hiring and retention bonuses. Hiring bonuses cost employers 9 cents per hour on average at workplaces with less than 100 employees, 4 cents per hour at workplaces with 100 to 499 employees, and 8 cents per hour for workplaces having more than 500 employees. Retention bonuses cost employers 10 cents per hour, 9 cents per hour, and 13 cents per hour, respectively, for the same three categories of establishment size.

It is important to note that the hourly costs here are based on occupations in which workers were either provided or offered the bonus plans.

These data are a product of the Employment Cost Trends program. Referral bonuses are made by the employer to an employee for recommending an applicant who is hired by the establishment. Hiring bonuses are payments made by the employer to induce an individual to accept employment. Retention bonuses are payments to an incumbent employee to retain that individual within the establishment. Learn more about bonuses in "The cost and incidence of referral, hiring, and retention bonuses" (PDF 66K), by Thomas G. Moehrle, in Compensation and Working Conditions, Winter 2000 edition.