When Apple announced $180,000 retention bonuses for select engineers in 2022, the move raised eyebrows. And now, most recently, OpenAI’s ‘surprise’ retention bonus for its top researchers and engineering team behind GPT-5 sounded like a desperate move to stop talent bleed. 

The immediate question that comes to mind is: was it recognition of the most critical talent or simply a desperate attempt to win the AI Talent War with top rivals like Meta and Google? The answer revealed a deeper truth: while million-dollar bonuses grab headlines, they rarely guarantee long-term talent retention.

Josh Bersin, a global HR analyst, points out, “Compensation will always matter, but it’s not a sustainable differentiator.” He further emphasized that in the ‘War for People,’ when employees feel they’re fairly paid, and their experience in workplace culture, career growth, recognition, and leadership interaction is equally strong, they will stay with their organization.

What are the risks of such big 'retention' bonuses?

While retention bonuses may work as a quick fix, they often act like “golden cuffs” that employees are eager to break free from.

In an HBR discussion, Korn Ferry’s Rewards Analyst Tom McMullen explained that “retention bonuses are typically offered to employees who are in a key role and who have shown outstanding performance.”

But Tracy Winton of Iovance Biotherapeutics cautioned about the risks of relying on them. “There’s no evidence they increase engagement or long-term loyalty. It moves the employee/employer relationship away from the ideal partnership state and towards the transactional,” she said. She further revealed that of all the employees she offered retention bonuses to, 90% eventually left the company.

So, hefty bonuses can’t guarantee long-term retention. In fact, they may backfire, damaging culture and normalizing a transactional mindset among employees.

Additionally, such payouts can even spark turnover drama—those receiving them may linger temporarily, but those excluded are more likely to walk out with immediate effect.

If we look at the numbers, specifically post-COVID, 70% of employees quit companies due to lack of career development and purpose, as shared in a 2021 McKinsey survey.

In another study the following year, it was found that the voluntary quit rate rose to 25% higher than pre-pandemic levels, with reasons varying from skill mismatch and changing industries to caregiving responsibilities, better benefits, and higher salaries. The study also noted that flexibility was a key factor in retaining employees post-pandemic, which gave rise to remote and hybrid work options.

Similarly, a 2023 Gallup report noted that engaged employees are 23% more productive and significantly less likely to leave, regardless of compensation spikes.

This underscores a paradox: million-dollar retention bonuses may delay an exit, but they rarely change the underlying reasons someone considered leaving in the first place.

Where’s the missing link?

HR leaders and experts underline Employee Experience (EX) as the real driver of retention.

Noting the same, Brian Kropp, Gartner’s Chief of HR Research, told ResearchGate, “We see companies spend millions on pay strategies but overlook simple, human factors. Purpose, trust, and flexibility have a bigger impact on loyalty than many leaders realize.”

In practice, these simple human factors look like:

#1 Giving employees purpose and meaning: Unilever’s Compass strategy explicitly links business goals with sustainability, giving employees a sense of purpose beyond profits. It emphasizes ‘discovering meaningful purpose at work’ as one of the key focus areas for its workforce.

#2 Charting growth and development journeys for employees: Google’s landmark “20% time” policy, which allows employees to focus on personal projects during their workweek, ensured that they invested time in learning something new. It empowered them to pursue innovation and feel invested in the company.

#3 Making employees feel recognized and included: Salesforce’s “Ohana” culture prioritizes inclusion, recognition, and the well-being of each employee, reinforcing loyalty beyond financial perks.

#4 Ensuring well-being and happiness with flexibility: Microsoft’s popular hybrid work policy aims to enhance employee well-being, not just wages, and keep employees engaged. With a no one-size-fits-all approach to flexible work, it ensured better engagement, mental health, and a growth mindset for its workforce.

So, can a retention bonus be 'the fix' to employee turnover?

The Talent War will continue to exist, whether backed by AI tech shifts, skills gaps or changing employee expectations. And there will always be a threat of talent turnover, even through work transformations. 

But as competition for talent intensifies, organizations that fail to focus on holistic employee experience, especially job fulfillment and growth, are the ones most likely to lose out, according to PwC’s 2024 Global Workforce Hopes and Fears Survey.”

Bigger bonuses treat only surface-level symptoms and not deeper causes. Therefore, given the competition for top talent, it becomes crucial to invest in employees’ holistic experience, balancing pay with purpose, growth, and culture.

Time and again, 'human' wins the race, as empathy and experience continue to be the core pillars of talent retention.

As Google’s former Chief People Officer, Laszlo Bock, once said, “People don’t stay for money. EX is becoming the true currency of retention. The companies that win will be those that design workplaces people don’t want to leave, even when money is on the table.”

This was also echoed by Google’s Darryn Thyre in one of our recent podcasts, “Google is often pointed out for its lavish offices, but there’s a purpose behind that. It’s about giving people pride in where they work, and creating many ways to engage.”

In conclusion, if your EX ratings are slipping, whether due to mounting work pressures, silent toxic culture, or a lack of leadership empathy, you will inevitably bleed talent to competitors.

In the case of both Apple and OpenAI, Meta seized the opportunity by offering timely, lucrative packages and stronger career growth pathways to their top talent. In response, both tech companies rolled out hefty retention bonuses for select employees to stop further critical talent loss. 

But was that timely? Or holistic? This is where HR leaders must step in to ensure they don’t lose people over perks and packages.