Everyone entering the job market has a “dream job” in the back of their mind. For those moving into corporate careers, even the dreams come with perks and benefits. Whether it is a nice desk in an office with windows, a marked parking spot, company cars, paid vacation days, or even monetary bonuses, the corporate world has always drawn workers in with the promise of great benefits. Just like much of the rest of the world, though, these corporations are struggling to find and keep the best employees. Employers will continue to offer the basics, such as sick leave, paid time off, and insurance. However, many of them are now returning to an older, yet still sometimes successful, method of retention: “golden handcuffs.”
What are these “golden handcuffs,” though? Instead of just the basic benefits, these handcuffs usually come on top of the basics to those who already receive a high salary. They normally include things like salary bonuses, stock options, company cars, and even tuition assistance, and the cuffs are most likely to be found in the following industries: financial services, the law, consulting, the IT and Tech field, and healthcare. These areas of business understand that their employees are extremely valuable, and many of their staff members will receive great offers from competitors from time to time. To ensure that these workers stay with the company, management may offer these golden handcuffs as a way to dissuade employees from looking at those other job offers.
“You should have heard those knocked out jailbirds sing…”
There are many kinds of golden handcuffs offered to employees to keep them at a particular company. These are the most common:
- Milestone Awards: These rewards are given to employees for completing various tasks over a certain period of time. From monetary gifts to catered lunches, milestones are marked with celebrations and benefits. Most managers will tout these awards as soon as an employee is hired and onboarded, and many find that it helps the new hire become super productive straight out of the gate in order to get these benefits for themselves.
- Stock Options: As one of the most common forms of golden handcuffs, many companies will offer stock options because investments are an indicator of a company’s success. By giving employees stock opportunities, management makes it clear that a worker’s future can be made better and brighter by working hard to improve the company, and, therefore, their own investments in the business.
- Supplemental Executive Retirement Plans (SERPs): Usually offered to high-ranking employees of a corporation, SERPs are supplemental retirement income. These come with eligibility requirements, such as having to stay at an organization for a pre-determined number of years. As the instability of the country’s Social Security system increases, these SERPs have grown in popularity as a way to ensure a comfortable retirement.
- Bonuses: One of the most popular forms of golden handcuffs comes in the form of bonuses. Bonuses are supplemental incomes paid to employees, usually on a quarterly or annual basis. These also allow for companies who pay an average salary to have an edge in the hiring market. The promise of a large monetary bonus not only keeps employees, but also pushes them to work harder and be more productive in order to increase the size of the bonus.
“Get busy living, or get busy dying…”
Why are golden handcuffs making a resurgence in popularity at certain companies? Forbes put it succinctly when they said “Money, power, and status are powerful incentives for keeping our hands tied…” Upon closer inspection, there is more to it than that, though. These things also bring a sense of safety and security for employees and their dependents, and the importance of that cannot be underestimated. For some workers, particularly if the golden handcuffs are financially based, it can be hard to face losing bonuses and extra income.
For employers, however, there are more risks to using golden handcuffs these days. A negative connotation has been attached to the concept in recent years. With all of the fluctuations in the labor market since 2020, workers don’t want to feel tied to a job for purely financial reasons. Everyone wants to feel fulfilled in their work, and, sometimes, money is not enough to keep them happy. This means that certain golden handcuffs are declining in popularity. For example, some handcuffs have contractual obligations, and workers are losing interest in those types of benefits. Things like moving allowances require employees to stay at a company for a certain amount of time, and, if the worker leaves, requires them to pay the allowance back. Other businesses will offer company cars, but, if an employee leaves their job, they feel as if they have to scramble to find another mode of transportation. Non-disclosure agreements and non-compete contracts also act as handcuffs by not allowing workers to move to another company in the same industry. Workers, if not happy in their job, can feel trapped by their golden handcuffs.
In 2023 and forward, if companies are looking to use golden handcuffs in their own recruitment and retention strategies, it is extremely important to remember both the pros and the cons of the method. As we have mentioned in our previous article about toxic office environments, sometimes there are not enough incentives to keep employees working in an office. (See our article from August 2023, Removing Toxicity from the Workplace.) If an employee begins to feel as if their job is a prison that they can’t escape from, then it can, and will, start to affect their work and productivity.
At this point, businesses have two choices: they can do away with the benefits that require workers to comply with contractual obligations, or they can do away with the golden handcuffs altogether. Articles and blogs are popping up that tell employees about breaking or “slipping off” their golden handcuffs, so it is important for companies to understand that these methods of keeping workers are having their limits tested daily. Is it worth the risk to implement programs that can be described as golden handcuffs only to have them broken or lead to a staff that feels trapped in their jobs? Or does your company desperately need those top-tier professionals and are willing to make these kinds of promises to recruit and retain them? That is up to each individual business!
Meaghan Goldberg covers recruitment and digital marketing for Lionzone. A Patterson, GA native, after graduating from both Valdosta State University and Middle Tennessee State University, Meaghan joined Lionzone in 2018 as a digital recruitment strategist before becoming the social media manager.