ABOUT YEAR-END JOB OFFERS & ACCEPTANCES

It is highly unusual for an organization to pay a bonus to an otherwise bonus-eligible individual who is no longer an employee at the time of pay out. Also, it is unlikely that a new organization will be willing keep the new employee 100% whole. However, they may, in some but certainly not in the majority of instances, take part of the amount of the forfeited bonus into account in making its compensation offer.

As we approach year-end, a lot of companies are wrapping up their final job offers for 2023.

• Companies recruiting for talent (whether themselves or through an executive search firm) need to be aware that candidates may be reluctant to accept an offer of employment without first receiving their 2023 performance bonus.
• Candidates on the receiving end on an offer of employment should know their current organization’s policy related to payments of performance bonuses.

Here’s why it is an important matter which requires early, clear & transparent communication between the parties.

• Most companies (especially publicly traded ones, plus many private ones) do not pay out annual performance bonuses at year-end.
• Instead, they do so after their year-end financial statements have been verified or audited. This commonly occurs around the end of the 1st quarter of the new year.

A good executive search consultant show learn about a candidate’s bonus situation early on in the relationship. In turn, they should communicate with the client company about it. This enables the company to make a decision up front about its interest in the candidate.

• By the parties all being aware, it can avoid an unanticipated snafu being experienced by the three parties involved, resulting in an undesired outcome for everyone.