The “golden hello” — more commonly known as a “signing bonus” — is back. Research from WorldatWork found that sign on bonuses were at an all-time high last year: 74% of employers were offering them, versus just 54% of employers back in 2010.
Not only are more organizations offering signing bonuses to new hires, but the bonuses are also being paid at higher rates. Executives have benefited most from this generosity, with 41% of them now receiving more than $50,000 in signing bonuses.
It’s not really surprising to see the rise of the signing bonus, as highly discerning employers are running out of ideas to attract top talent in a highly competitive market. The golden hello seems to offer a quick fix to the problem.
But, before we all start open our corporate purses and foisting thousands of dollars on hard-to-find candidates, it’s worth considering whether or not signing bonuses really do attract high-quality talent.
Little Direct Evidence Suggests That Signing Bonuses Will Actually Attract More Applicants
However, we could make a roundabout argument in support of the signing bonus. Several studies have shown that applicants are more likely to reply to job advertisement that clearly present pay. One would imagine that if a signing bonus was clearly presented in the job advertisement, that would make the role more financially attractive, thus drawing in more applicants.
However, this is a risky approach. A publicized signing bonus could make your business sound desperate, damaging your employer brand. It could also create resentment in existing employees who hadn’t received signing bonuses when they joined the company. Highly public signing bonuses might also encourage mercenary candidates to apply — you know, those candidates who care way more about the bonus than they do about your business.
If you are going to use signing bonuses as a talent acquisition technique, it might make sense to communicate these bonuses on a need-to-know basis.
Signing Bonuses May Help in the Negotiating Room
Using signing bonuses to attract talent may not be a great strategy. But that doesn’t mean signing bonuses are useless. In fact, the golden hello can be very useful at the negotiating table.
Signing bonuses can be used to offset any specific losses that a candidate may incur as a result of changing jobs, such as a reduced salary, a loss of benefits, or an increased commuting time. By easing the pain of these losses, signing bonuses can give hesitant talent the impetus to make the jump.
It seems clear that there are some real advantages to using a signing bonus in these talent-scarce times — but it should be used judiciously. Don’t go flaunting your signing bonuses in an attempt to woo talent. Instead, introduce the signing bonus quietly at the negotiation stage as a way to coax high-quality candidates over to your corner.
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