In yet another indication of the competitive candidate market, more companies are offering sign-on bonuses.
Research from nonprofit human resources association WorldatWork finds that the number of companies using sign-on bonus programs stands at a 15-year high. What’s more, the use of sign-on bonuses jumped from 54 percent in 2010 to 76 percent in 2016.
In some industries, the practice is even more prevalent. Separate research from WorldatWork, released in May 2017, finds that 82 percent of companies in manufacturing offer hiring bonuses, while 80 percent of healthcare and social assistance organizations have programs in place.
A sign-on or hiring bonus is defined as a cash bonus given at the beginning of a service period, usually for accepting an employment offer.
Pros and Cons
There are many advantages to sign-on bonuses. They let a candidate know the company is serious about an employee relationship. Sign-on bonuses also send a signal that a candidate is valued, that she or he is worth the cost of hire.
Sign-on bonuses come with potential pitfalls, as well. If they are offered to everyone, new hires may come to expect them. If they are offered to only a select group of new hires, current employees may feel less valued.
Still, desperate times call for desperate measures, and employers appear to be responding to a painfully tight labor market.
Employees Wanted
Sign-on bonuses, once reserved for top-level positions, are now being dangled in an effort to attract employees for a wide range of positions.
Among the companies offering sign-on bonuses is ride-hailing service Lyft, which offers such bonuses to all new drivers. Car rental company Hertz offers sign-on bonuses to call center specialists, who work from home.
In certain industries, as WorldatWork research suggests, the practice is more widespread. Hospitals and other healthcare facilities that have struggled for years to find nurses and other medical professionals are offering hiring bonuses—and many of these bonuses are quite generous.
The Sun Sentinel reports that Boca Raton Regional Hospital has offered sign-on bonuses of up to $20,000 to qualified nurses.
Job postings for nurses and other medical professionals nationwide show the Florida hospital is not alone in the practice.
In Cheyenne, Wyoming, Granite Rehabilitation & Wellness is offering $3,000 to new nurses. In New Richmond, Wisconsin, Westfields Hospital is touting a $2,000 sign-on bonus to attract a clinical assistant. And in Sac City, Iowa, ABCM Corporation, which operates Parkview Rehabilitation Center & Park Place Assisted Living, will pay a $10,000 sign-on bonus to its new director of nursing.
But the practice of paying top dollar isn’t confined to health care. In Nashville, Tennessee, Metro Nashville Public Schools is currently offering up to $6,000 in sign-on bonuses in an effort to fill teacher vacancies in high-need subject areas.
Employers, it seems, are learning that paying job candidates leads to new hires.
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Paula Santonocito, Contributing Editor for Recruiting Daily Advisor, is a business journalist specializing in employment issues. She is the author of more than 1,000 articles on a wide range of human resource and career topics, with an emphasis on recruiting and hiring. Her articles have been featured in many global and domestic publications and information outlets, referenced in academic and legal publications as well as books, and translated into several languages. |