A financial incentive paid to encourage key employees to remain with the organization.
A retention bonus is a financial payment made to an employee contingent on them remaining with the organization for a specified period — typically used to retain key talent during periods of organizational change, M&A activity, or when the employee is at high risk of leaving. Retention bonuses are usually repayable (pro-rata or in full) if the employee leaves before the retention period ends. While effective in the short term, organizations should address underlying engagement and culture issues alongside financial retention incentives.
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