site.bta73% of Companies in Bulgaria Planning to Pay Christmas Bonuses, Survey Shows

A survey conducted by the Bulgarian Chamber of Commerce and Industry (BCCI) between December 15 and 18, 2023 shows that 73% of companies are planning to pay Christmas bonuses. 

A total of 162 organizations and companies from different sectors, including services, construction, trade, machinery and equipment, food and beverage, participated in the survey, providing an in-depth insight into the dynamics of the incentive policy in the country. This time, there was a 76% increase in the participation of managers compared to the 2022 survey.

The survey reveals the attitudes among company executives and their willingness to further support and motivate their employees for the Christmas holidays. It shows how companies adapt to changing economic conditions and testifies to a growing understanding of the importance of motivating and retaining employees in times of uncertainty.

Data show that the share of companies that will pay bonuses is once again significantly higher than that of those that will withhold bonus payments.

A total of 73% of companies will reward their employees with bonuses, which is optimistic in today's dynamic environment. A change, however, is observed in the companies' incentives.

The share of companies that can afford to pay bonuses in 2023 has dropped from 33.70% to 29.63%.

Yet, the percentage of employers who pay bonuses not only to reward their employees for the Christmas holidays but also to motivate and retain them increased from 43.48% to 51.85%. 

There is, however, a 11.54% decrease in the percentage of companies planning to pay bonuses in 2023 compared to 2022. This decline could be attributed to a number of factors.

Firstly, the minimum monthly wage increase set to take effect as of January 2024 will create additional expenses for companies. A total of 4.3% of companies pointed this out as a reason to refrain from paying Christmas bonuses.

Secondly, there is a general shortage of financial resources, which reflects the current economic condition. The share of companies that cannot afford to pay bonuses has tripled in 2023 compared to 2022.

And third, some companies have already raised their employees' salaries in 2023, which appears to have made them reluctant to further reward employees with Christmas bonuses.

The expected minimum monthly wage increase of 19.62% (from BGN 780 to BGN 933) and the overall increase in employers' costs per hour worked of 15.1% in the third quarter of 2023 compared to the same period of 2022, have led to a significant increase in labour costs. The increase in industry was 16.6%, in services 13.9%, and in construction 17.0%.

These factors, combined with inflation, may account for why 17% of companies do not plan to pay Christmas bonuses and why 9% have not decided yet, which is a 5% increase compared to 2022.

In terms of the way bonuses are awarded, the survey found that 49.65% of employers divide the bonus amount evenly among all employees, 39.72% decide on bonus amounts based on the employee’s performance, and 10.64% distribute bonuses according to the company’s hierarchy.

As to the bonus amount, the largest share of companies, 34%, will allocate up to BGN 200. The share of companies that will pay between BGN 200 and BGN 500 in bonuses has increased from 25% to 29% in 2023. There is a decline in planned bonuses of over BGN 1,000 - 12% down from 14% in 2022.

In conclusion, the survey shows that 49.64% of companies will keep their bonuses unchanged compared to 2022, while 43.88% will increase them. Only 6.47% are planning to lower bonus payments, which is a decrease of 8% compared to 2022.