Whilst nothing new, we are seeing more signing bonuses (aka golden handshakes or signing on bonuses), in today’s mad scramble to secure the best candidates.
Essentially, it’s an extra payment you receive for joining the company. They are used as a tactic to secure top talent, sometimes to help with relocation costs. They aren’t run of the mill, so it can be very flattering if you are offered one. However, there are a few points to consider.
- When is it paid, directly on starting or in increments?
- Do you have to pay it back if you leave within a certain time period?
- When will your salary next be reviewed?
- Is this the job you really want, or is the bonus the most appealing aspect?
- Is this just a supplement to make up for being unable to meet your overall salary/benefit expectations?
The Downsides to a Signing Bonus
In the current market, there are far more jobs than candidates. Therefore, employers are increasingly using signing on bonuses to attract people. While they are a very nice extra, there are downsides to consider before you accept any offer that includes one.
- You only get it once (obviously!), so if it’s there to make up a shortfall in salary, think about what you’ll earn in year 2. Ask about the frequency of salary reviews, so you know the timelines.
- The bonus might attract you, but what should secure the deal? The job, of course!. Think about your career in the long term, and discuss with your recruiter which option will best meet your long term goals.
- If you haven’t been offered a golden handshake and really want one, talk to your recruiter about how to negotiate – you will need to be prepared to justify your request to the potential employer.
The Client Perspective
If you are a hiring managers reading this, these are some considerations:
- A signing on bonus is an increased cost to the hiring process which may affect cashflow
- If you only offer them to select employees, it might affect morale of the overall team
- Some employees may take the sign on fee and quit immediately if there is no time-limited clause in the contract
- Do you need to offer this as an incentive to attract candidates? Highlight other benefits during the recruitment process that are also good for attracting the best; for example, training opportunities that give you the edge over competitors
If you have any further questions on signing on bonuses, please do get in touch here and a member of our team will be happy to help!