What is a sign-on bonus and how can it help you secure talent?
A sign-on bonus is a financial award offered by a company to a prospective employee as an incentive to join their company.
A sign-on bonus or hiring bonus takes the form of a one-time payment provided when you sign on to a new role.
The pandemic supercharged the need for specific roles, adding more pressures on the health care, retail, and restaurant industries to staff up.
In 2021 The number of employers offering a signing bonus to new recruits had spiked by 75%, according to new research from the world’s largest job site Indeed.
For some positions, a sign-on bonus could entice the applicant to sign on with your company for the job role you are trying to fill, providing an extra incentive for the candidate to accept your offer.
It’s also a way for your company to make up for salary demands you may be unable to meet. But, ultimately, it’s used to incentivise applicants to accept the job, especially if you’d like to attract an exceptionally talented candidate.
Some benefits of offering a sign-on bonus can include:
- It can be an extra incentive for a potential candidate who is not yet convinced. This is often used for top talent who may need a little motivation to leave their current job.
- A hiring bonus can be used if your company doesn’t offer any formal relocation support. This can help a new employee counterbalance some of the expenses with a new job and a new move.
- It may create a competitive advantage especially if the candidate has other job offers to consider.
- To match a candidate’s initial salary requirement while not keeping the full amount in the annual budget. This can allow your business to keep its salary budgets intact while still offering an enticement for a candidate who may be just out of reach otherwise.
In this period of the pandemic, a hiring bonus is a way to help employees through difficult times and boost performance and morale.
It is important to highlight that if your employee quits within a certain period of time after accepting the position and bonus, they may be required to pay back all or part of the signing bonus.