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This question is about employer.
What is retention pay?
Retention pay, also referred to as retention bonus or stay bonus, is a monetary incentive that is provided by an employer to an employee to encourage the employee to stay with the company for a set time.
Retention pay can also be referred to as a retention package, and it represents a lump sum of pay in the form of a bonus that an organization gives a specific employee to get them to remain at the organization for a particular time.
In general, retention pay tends to be fairly large sums of money, and they average in the range of 10% to 25% of the specific employee's base compensation. One factor that affects the amount of an employee's retention bonus is the amount of time the employee agrees to stay at the company.
This form of a bonus is also most often offered to senior-level employees, employees whose job performance is outstanding, and other key employees. Retention bonuses often happen during turbulent times for a company, in situations like:
Mergers
Acquisitions
During large projects
Important times of production
Retention bonuses are more commonly found in large companies and corporations, those with staff rosters of +20,000 employees. Retention bonuses are more seldom found in smaller organizations and small businesses. Retention bonuses are utilized by large companies across the spectrum of industries.
Companies also utilize retention bonuses to keep other companies from stealing, or poaching, their most prized employees and executives.
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