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My employer is going to pay me a retention bonus for my hard work and the fact that they want to keep me around for the foreseeable future to help with system integration etc.

While it's quite generous I think I should get more.

is a retention bonus something that you should negotiate if you think you're worth more (like a salary increase) or not? My negotiation would be purely based on how hard I work and what's expected of me in the coming months, not because I think I'm irreplaceable (which I'm not).

Any advice appreciated.

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    Do you have a company policy that describes this? Some bonuses are fixed or formulaic and not really negotiable at all because of this.
    – enderland
    May 11, 2015 at 20:26
  • I don't think there is because I know before I joined a similar thing happened and the bonus was a different rate. May 11, 2015 at 20:29
  • I won't quit over this because what they've offered is quite good, but they don't know that. My leverage is that they need me for my knowledge of the existing systems for a couple of very big projects May 11, 2015 at 21:04

1 Answer 1

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If I offered someone a bonus, not a regular annual one but a special "we love you, don't ever leave us" one, and they replied with "really? I think you should offer me more than that" I would seriously start to think about what would happen if the person left. I know, it sounds like the retention bonus was because they thought about what would happen if you left, but in many cases people don't get much beyond "it would be a big disruption, let's make sure it doesn't happen." But if you said my $X isn't enough to be sure to keep you around, then I need to really look at what another you might cost, how long it might take to get the new person up to speed, and what would happen while we didn't have an effective person in the role.

Now one of two things will happen:

  • I offered you, say, 5K, and realize that replacing you would easily cost me 100K. I can double the bonus and give it to you for ten years and still be ahead (what with time value of money) over replacing you.
  • I offered you, say 10K, and realize that replacing you will cost me 30K. If I give you more bonus, perhaps 15K, and do it again next year, when the third year rolls around it would have been cheaper to take the pain with the new guy. In fact even at 10K perhaps I was being foolish just trying to avoid that pain. You know what, never mind, if you need to move on we will all give you our very best wishes and support. Let me know if you need days off to schedule interviews.

At the very least you should know what a new person would cost, how long they would take to be at least a little bit useful, and the kind of money on the line if your role was empty. While in general money matters more to you than to the firm, you can't count on that to assume you've always got a blank cheque.

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    All about perspective, isn't it?
    – Brian
    May 11, 2015 at 21:58

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