More companies giving workers once-off bonuses to help with inflation

More companies are giving staff an extra bonus or allowance this year to help them through the high inflation, with amounts ranging from 150 euros to 2,000 euros. Over a third of collective bargaining agreements made this year included a once-off bonus, compared to about a quarter in other years, NOS reports based on figures from employers’ organization AWVN.

Retail chain Action will give employees 350 euros next month. NS staff will twice receive 1,000 euros. Rabobank gave employees 500 euros extra this month, along with an email with “practical tips and mental support” on financial health.

Most companies give employees a fixed bonus regardless of their salary. But telecom KPN is giving high earners 150 euros, and people with a lower wage 350 euros.

The once-off bonuses have some drawbacks, Kilian Wawoe, a remuneration expert affiliated with the Vrije Universiteit, said to NOS. “We know from research that if you give something and then don’t give it the next time, it is experienced as a loss, even if you announced it in advance.”

He called KPN’s decision to offer different amounts “opening Panroda’s box.” “The same income is very different for, for example, someone with five children who want to take a long shower in a drafty house than for someone who is single. As an employer, you should not want to enter these discussions.”

AWVN called it logical for the bonuses to be once-off. “As an employer, you do not know how long inflation will remain so high. If you make it structural, you are stuck with it,” a spokesperson said to the broadcaster. “The times are too uncertain to say that.”

In addition to once-off bonuses, employers are also increasing salaries more, though wage increases remain far behind inflation. Collective agreements made in October included an average wage increase of 4.2 percent. Inflation was 14.5 percent in September.

During times of crisis, trade unions are usually more popular. And that is also the case now with the incredibly high inflation. Trade union FNV got 4,500 new members in September, considerably more than the average of 3,000, union director Tuur Elzinga said to AD. In October, 5,434 people joined.

Most of the new members are young people under the age of 35, Elzinga said. “Many people feel the rising prices in their wallets. They see that it is important that there is a strong union to stand up for their interests.”