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Employers are using sign-on bonuses at an increased rate to attract talent – and there are ways employees can capitalize on this trend.
A signing bonus is a financial sweetener – often a sum of money – that companies offer to potential new hires.
The offers vary greatly depending on the company and position and can be quite generous. For example, Walgreens is offering a $75,000 signing bonus to pharmacists in some areas to ease staffing shortages, according to a recent report in The Wall Street Journal.
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In July, 5.2% of all job postings advertised a signing bonus, a slightly lower share from December’s peak of 5.5%, but still about triple the July 2019 level, according to an analysis of internal data from careers site Indeed.
This suggests that employers are competing to fill vacancies while workers are still “in the driver’s seat,” according to AnnElizabeth Konkel, economist at Indeed.
“If employers could find workers like sand by the sea, I don’t think they would use contract bonuses that way,” Konkel said.
8 job sectors that advertise the most signing bonuses
According to Indeed data, the trend is more prevalent in personal health care jobs such as nursing, dentistry, medical technicians, doctors and surgeons, and home health care. More than 10% of job postings in these respective categories offered a signing bonus benefit in July.
For example, the proportion of jobs advertising these bonuses increased from 6% to 18% over the three years from July 2019 to July 2021, according to Indeed.
Here are the top eight professions that advertised with a signing bonus in July 2022, according to Indeed.
- Care: 18.1% of all job offers
- Drive: 15.1%
- Tooth: 14.7%
- Vet: 13.5%
- medical technician: 12.6%
- Doctors and Surgeons: 11.4%
- Childcare: 11.3%
- Personal care and home health: 11.3%
“The demand for labor continues”
Workers have been enjoying the benefits of a strong job market since early 2021, when businesses ramped up hiring as they reopened more broadly after a pandemic-era lull.
Job vacancies soared to record highs and wages rose at their fastest pace in decades, prompting employees to quit in record numbers and find better quality or higher-paying work elsewhere.
Despite the slowdown in recent months, the trend known as the “Great Resignation” or “Great Reshuffle” remains in full swing, according to labor economists. Although polls suggest some workers later regretted their decision if, for example, their new gig didn’t live up to expectations.
The July jobs report released last week beat expectations and the US unemployment rate has fallen to pre-pandemic levels, the lowest since 1969.
“Demand for labor is still strong, giving workers the opportunity to negotiate what they want,” Konkel said. “Maybe that’s a sign-on bonus, maybe that requires a higher hourly wage, maybe that’s flexibility, maybe that’s a special benefit.”
Negotiating a Signing Bonus: “Make Them Love You”
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There are a few ways workers can consider negotiating a signing bonus — or a better deal if one is already on the table.
First, think about the money you may be leaving on the table with your current employer, according to Mandi Woodruff-Santos, a career and money coach. She has estimated that negotiating signing bonuses increased her income by $160,000 over a 10-year period.
This category might include unvested 401(k) match funds or stock options — money that isn’t already yours but would be if you stayed at your current job. It may also include tuition reimbursement or a sign-on bonus that your current employer paid but which you would have to repay if you fail to meet certain contractual obligations, such as length of service.
Add it all up, and you can use that total to negotiate a signing bonus of that amount with a potential employer, said Woodruff-Santos, who founded MandiMoney Makers, a group coaching community for women of color.
Workers can also research average signing rewards for people at their level of experience in their industry — and use that as leverage in the application process, she added.
For positions that specifically offer a bonus, employees may also consider stating upfront that they are not thrilled with the advertised bonus amount and asking if there’s an opportunity to increase it, Woodruff-Santos said.
Those conducting multiple interviews at the same time can also take advantage of a signing bonus offer with a potential employer to see if another potential employer can at least match.
“I’m always a fan of just asking,” Woodruff-Santos said. “That means the rationale behind it has to be there: you have to tell the story of why you’re asking.”
However, she recommends waiting about two-thirds of the interview process to negotiate the amount, when all signs point to an upcoming job offer.
“Suck them in [first] and make her love you,” she said.