Amid strong signals of improvement in the U.S. economy, companies aren’t getting quite so confident that they’re indulging in a holiday spending spree this season.

In fact, companies overall seem to be pulling back from good cheer. According to a Challenger, Gray & Christmas survey released on Monday, fewer employers are offering year-end bonuses, compared to 2022. More companies are reducing the size of bonuses, and even non-monetary and nominal awards are being truncated.

None of the changes from last year is huge, but overall the de-emphasis on bonuses portrays a somewhat conservative corporate mindset.

“As companies enter 2024, [some] are doing away with the small tokens of appreciation in favor of saving money during a time of perceived economic softness,” said Andrew Challenger, workplace and labor expert at the outplacement and leadership development firm. 

He added, “Companies’ year-end plans are reflecting the position that 2024 will bring slower growth.”

Of course, economic expectations frequently prove to be off target. A year ago, many 2023 forecasts looked for low-growth or flat GDP, or even a recession. But at present, the picture is brightening. GDP has picked up since the year began, topping the run with 5.2% year-over-year growth in the third quarter. At the same time, inflation has eased and The Federal Reserve recently announced plans for three interest rate cuts in 2024.

Challenger noted that with employees more inclined this year to stay in their jobs, efforts to retain workers may have decreased in priority.

However, hiring plans suggest that while companies are being less generous with year-end bonuses, some have their sights trained on more strategic goals. Almost half (46%) of the 202 surveyed companies reported that they increased hiring in 2023 and expect to continue adding workers next year.

That was up from 39% of survey participants that responded as such a year ago, although it was still well below the 63% who planned to add workers at the end of 2021. 

Only 12% said hiring is likely to decrease in 2024, although that stat too was higher than last year (9%).

Bonus Bring-Down

A third (34%) of surveyed companies said they’re not awarding bonuses this year, compared with 27% a year ago. Meanwhile, 15% of companies are lowering the value of their bonuses, up from 11% that decreased bonuses last year.

Also, 24% of companies plan to award a non-monetary or nominal award, down from 29% who reported as such in 202 and 35% in 2021.

And fewer respondents reported offering bonuses at other times of the year. Of the 66% of companies offering bonuses, 27% report that they occur at times other than year-end, compared with 32% last year.

Challenger’s survey also asked about companies’ business conditions coming into 2024. Only 11% said conditions are worse than last year, while more than a third (35%) said conditions have improved.

The survey, which included companies of various sizes and industries, was conducted in November.