🎯 The Hidden Risk of Bonus Season

Each year, as September and October roll around, businesses across Australia celebrate a milestone — bonus season.
It’s a time to recognise performance, thank teams for their contribution, and re-energise for the final quarter of the year.

But for many startups and scaleups, bonus season also marks the beginning of something less celebrated: a wave of reflection and turnover.

At Pupal, we’ve seen it time and again. Bonuses are processed, messages of thanks are sent, and optimism is high — until a few weeks later, when a key resignation arrives. Then another.
Not because people are unhappy, but because the reward has signalled completion rather than continuation.

That’s the paradox.
When recognition is transactional, people interpret it as the end of a chapter, not the start of a new one.

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📊 What the Data Tells Us

There’s no single number that captures the “post-bonus exodus,” but global workforce research consistently shows the same truth: employees are more mobile than ever — and money alone doesn’t anchor them.

• In PwC’s 2024 Global Workforce Hopes & Fears Survey, 28% of employees said they were planning to change employers within the next 12 months — a jump from 19% in 2022.

• EY’s 2023 Work Reimagined Survey reported that 35% of employees expect to leave their current job within a year, citing career growth (25%), pay (35%), and wellbeing (17%) as top motivators.

• And the 2025 Work Institute Retention Report found that 37% of employees left their jobs primarily due to work–life balance and flexibility — not pay.

Across these studies, the message is clear: bonuses recognise effort, but they don’t guarantee engagement.
Once the payout lands, reflection begins — and for many, it sparks the question:

“What’s next for me here?”

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🧭 Why Startups Feel It Most

In large corporates, a few post-bonus resignations barely ripple the surface.
But in startups and scaleups — where each person holds critical knowledge, client relationships, and cultural influence — even one departure can disrupt momentum.

Smaller organisations also face structural challenges that make them more vulnerable:

• Unclear career pathways. Roles evolve quickly, but progression isn’t always defined.

• Accidental managers. High performers become leaders overnight, often without guidance or tools.

• Rapid change. Strategy shifts frequently, creating uncertainty about what’s next.

So, when bonus season arrives and people naturally pause to reflect, the absence of clarity becomes the loudest message.

It’s not that employees are disengaged — they’re just uncertain about how their future fits within the business.

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💬 The Human Side of the Paradox

Bonuses are powerful — they acknowledge results, drive motivation, and show appreciation.
But psychologically, they also mark an ending.

People anchor meaning to milestones. When the bonus conversation focuses entirely on what’s been achieved, without connecting to what’s ahead, it closes a loop rather than opening one.

That’s why employees often feel free to move on after bonuses are paid. The financial tether is gone — and so is the story about what comes next.

It’s not the payout that drives resignations; it’s the lack of future narrative.

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🧩 Turning Recognition Into Retention

Startups can’t (and shouldn’t) avoid paying bonuses. But they can use this moment intentionally — to reconnect, reset, and recommit.

Here’s what that looks like in practice:

1️⃣ Start Conversations Before Bonuses Land

The best retention strategies begin early.
In August or September, have stay conversations with your key people. Ask:

“What’s exciting you right now?”
“Where do you want to grow next year?”
“What would make this next chapter meaningful for you?”

When people feel seen before they’re paid, the bonus becomes validation — not closure.

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2️⃣ Pair Reward With Future Direction

Bonuses recognise performance.
Retention depends on purpose.

When discussing rewards, connect them to what’s next:

• How the role will evolve.

• What growth looks like in the next six months.

• How their contribution connects to company goals.

Make the bonus the bridge between achievement and aspiration.

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3️⃣ Equip Managers for Real Conversations

Front-line managers are the biggest influence on retention — yet many new leaders feel unprepared for meaningful career discussions.  Investing in basic leadership capability (feedback, recognition, career planning) has a compounding effect. It creates leaders who can hold honest, motivating conversations year-round — not just during pay reviews.

At Pupal, we often say: “Retention happens in conversations, not in spreadsheets.”

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4️⃣ Build Flexibility Into Growth

The data from 2025 is impossible to ignore: work–life balance and flexibility now outrank compensation as the leading cause of resignations. Startups that embed sustainable rhythms — flexible hours, hybrid models, wellbeing boundaries — retain people longer because they make growth feel achievable, not exhausting. A bonus can reward hard work. But flexibility ensures that effort is sustainable.

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🌱 From Transaction to Trust

Bonus season doesn’t have to signal separation. Handled thoughtfully, it can be a moment of reflection, reconnection, and renewal. The most successful founders treat it as a checkpoint — a structured pause to align expectations, celebrate progress, and plan what’s next. Because when you combine reward with recognition, and recognition with direction, you transform a financial transaction into a relationship of trust.

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🧾 In Summary

• The pattern: Bonuses reward results but can unintentionally mark the end of a journey.

• The reality: Most employees leave for reasons tied to growth, wellbeing, and leadership — not pay.

• The opportunity: Use bonus season as a retention checkpoint to strengthen connection, clarity, and commitment.

Money lands in the account. Meaning keeps people in the business.

This article draws on insights from Pupal’s work with Australian startups and scaleups, alongside global workforce data from PwC (2024), EY (2023), and the Work Institute Retention Report (2025).
It reflects a simple truth we see every year: recognition is powerful, but without a future story attached, it risks becoming a goodbye.