An employee retention bonus agreement.
Congratulations! You've just been offered a retention bonus. As you consider this opportunity, it's important to understand what a retention bonus is and carefully weigh the decision of whether to accept it.
A retention bonus is a lump sum paid to the employee by a company in exchange for the employee agreeing to remain on board until a specific date or upon achieving a particular milestone. Usually, retention bonuses are sizable amounts of money, ranging from 10% to 25% of an employee's base pay.
Here are some factors to consider when deciding if accepting a retention bonus makes sense for you.
You may feel obligated to stay
Retention bonuses are often awarded to recognize and reward employees. However, a retention bonus may hold you back from considering other options that may be better for you in the long run. You'll have to weigh the pros and cons of staying with your current employer before saying, "I'm in!"
How generous is the offer?
Sometimes, an offer is way too good to pass up. Just because you accept a retention bonus doesn't mean you can't look for another job. Worst-case scenario? You pay back the money. However, in most cases, the money isn't paid to you until you've completed your obligation, so paying back the money isn't usually an issue.
On the other hand, if the offer is paltry, then your employer is signaling to you how much you are valued. Time to polish up the old resume!
Is the company willing to put their offer in writing?
If the answer is no, don't spend much time planning how you'll spend your newfound wealth, as you may never see it. In cases like this, it's best to hold onto all email correspondence related to this matter.
Read the fine print
Typically, a retention bonus contract will contain some fine print that you best understand before signing. Have a professional look over the offer with you and advise you on your specific situation.
Don't be afraid to ask for more
The first offer that's put on the table is rarely the best. Consider asking for a higher retention bonus. The worst thing that can happen is your request is denied.
I see no harm in accepting a retention bonus, even if you plan on leaving. It's taking a lot longer today to find work, so by the time you do, you may very well leave with a new job in hand and your retention bonus.
