Landing a new job offer after a long job search and interview process is usually enough to get most people excited. But what if you also score a bonus from your new employer before you ever clock in? Those types of cash benefits — often called signing or sign-on bonuses — have become more common as the economy has strengthened.
"Unemployment is about as low as it's been in 50 years," says Andy Challenger, a vice president at Challenger, Gray & Christmas, an executive outplacement firm that helps displaced workers transition to new jobs. "Companies are having to fight for the best workers."
Last year, 23% of employers offered signing bonuses as part of nonexecutive job packages, according to data from the Society for Human Resource Management. That's down from 25% who made such offers in 2017, but up from 20% in 2014. The share of companies offering bonuses to executives has ranged from 28% to 35% in recent years — and last year, 29% did so.
Bonuses can be sizable, too. Employers of all types, ranging from hospitals to hotels, are offering job candidates as much as $20,000 to fill empty positions, according to a Glassdoor report from earlier this summer.
Signing bonuses are more often offered to executives than rank-and-file employees. Still, if you've been offered a new job, there's a deceptively simple way to get a signing bonus: Just ask. It could end up netting you a few hundred dollars, or even a few thousand, from the hiring managers.
"My big rule is, if you don't ask the question, you're not going to get it," says Shannah Compton Game, a California-based certified financial planner. "The worst case is the employer says, 'No.'"
If you're going to ask for a bonus in the negotiation phase of a job hunt, make sure you don't ask for too much. Ask for a bonus that's equivalent to "5% to 10% of your base salary," says Game, who also hosts the Millennial Money podcast.
Finding quality candidates costs potential employers a lot of time and money — a search lasts 42 days and costs $4,129 on average, according to data from the Society for Human Resource Management. So, if an employer likes you, there's a good chance they'll consider your request for a reasonable up-front bonus rather than incurring the cost of starting their search over from scratch.
Employers offer signing bonuses for three main reasons, according to Monster.com:
- To beat out other employers competing for talent.
- To circumvent salary limits — if you ask for a higher salary than an employer is willing or able to pay, a one-time cash bonus can help make up the difference.
- To compensate candidates who may be leaving a job at which they're expecting a bonus or other benefits.
The strong economy over the past several years has led many employers to adopt signing bonuses as a way to attract talent, says Challenger. "It's a good mechanism for companies," he says, as employers fight to "poach workers away from their jobs."
Even so, don't expect to see signing bonuses advertised on the job listing or touted during your interview process. A lot of companies don't have formal protocols for them, Game says. Instead, companies handle bonuses on a case-by-case basis. Yet another reason to make the ask part of your salary negotiations.
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