I started my career back when Bill Clinton was president, and Linda Tripp was the worst co-worker in the history of Corporate America.
(Seriously, people, your colleagues are not your friends.)
Back in those days, HR departments regularly approved signing bonuses. It was essential. The economy was sound in the mid-to-late 1990s, talented people were hard to find, and exceptional candidates were still digging out of debt caused by the recession under the George H.W. Bush administration.
(Wow, seem familiar?)
When the stakes are high, signing bonuses are one-time payments that can motivate candidates to take the plunge and join your company.
Should you use signing bonuses? Maybe.
Do you hire recent graduates?
Private student loan debt is at an all-time high, and in my opinion, college administrators and lending company executives are crooks for pushing kids under 21 to sign contracts that are harder to change or break than your standard mortgage. If you hire college graduates (especially those who have recently completed an MBA program), a sign-on bonus can wipe away some of that debt.
I have hired marketing, finance and scientific professionals from top-tier schools. Since we benefitted from that education, my company used signing bonuses as a tool to show our candidates that their debt wasn’t incurred in vain.
Do you hire executives?
Many executives expect a golden hello as well as a golden parachute. Those candidates are dicks. Avoid them. But depending on a candidate’s previous employer, she might be leaving a big total rewards package to join your organization for a different reason. That being said, mama’s gotta eat, and she likes champagne.
Even if you can’t make a candidate whole, a signing bonus can make the most skittish executive feel that she’s joined your company with some compensation congruity.
Do you hire STEM workers?
Of course you do. Everybody hires STEM workers. My favorite line is when people tell me, “We’re not an [insert industry] company. We’re a technology company.”
Okay, okay. You’re a technology company. Start thinking like a tech recruiter and put your money where your mouth is.
Do your benefits packages need some work?
There are companies in America, right now, that don’t have very good health insurance plans. Some don’t match an employee’s contribution to the 401(k). Some organizations have vacation policies that can only be described as weak sauce.
If your company falls into any of those categories, and your HR team doesn’t have the power to address your non-cash incentive plans, a sign-on bonus can abate any concerns that you’re not interested in the financial well-being of candidates and employees. Offer some cash upfront so that you don’t look as cheap at other points in the employee lifecycle.
You may wonder if candidates expect sign-on bonuses.
I think the word “expect” is strong, but if a candidate or third-party recruiter asks you to consider a signing bonus, don’t be offended.
Signing bonuses are here. They’re back. And for the most talented and privileged candidates among us, they never went away.
I guess what they say is true. Everything old is new again.