Work out retention bonus value instantly with clear inputs, formula shown and shareable results.
A retention bonus is worth its discounted present value, and the monthly equivalent is what makes it comparable with a pay rise. From the employer's side, only the portion paid to people who would otherwise have left is genuinely incremental — the rest is a windfall.
Present value
PV = Bonus / (1 + Discount rate)^(Months / 12)
Incremental value
Incremental = PV x (1 - Probability of staying anyway)
For the employer it is cheaper and reversible. For the employee a rise compounds into future increases and pension, so it is usually worth more over time.
When the reason for leaving is the manager, the work or the trajectory. Money delays the departure rather than preventing it.