We heard from many of our clients that filling open positions has been difficult, with many candidates receiving multiple offers. The difficulty in attracting candidates is more than having a candidate pool but also finding qualified and diverse candidates – those who want evening or overnight shifts, and candidates having multiple opportunities which is pushing pay rates higher.
Employers have been using sign-on bonuses to entice candidates to consider and apply to their company. In addition to alternative pay options, higher base salaries and development of career paths are being used to attract talent. Wilson Group recently conducted a survey focused on obtaining information on Sign-on Bonuses, and this is what we found.
Most respondents use sign-on bonuses for specific jobs rather than applying one amount for all jobs or all jobs being eligible. The amount of the bonus varies based on the job in most cases (62%) but we know the minimum amount is at least $1,000.
There was not a clear response as to the waiting time for when the bonus pays out except that paying out past 120 days was not common. There is a sense that sign-on bonuses are effective in keeping pay rates to an appropriate level and attracting candidates but was evenly split in responses between “somewhat” to “not effective”.
In conclusion, these responses indicate that sign-on bonus programs need to be carefully designed around which positions are eligible, the amount, and payout timing. From our clients we hear that payout timing could include payout in installments, that sign-on bonuses can be as high as $10,000 depending on how few candidates there are in the market and the market in which one competes for talent (rural versus metro area for example). Also, new hire pay arrangements could negatively impact the retention of current employees. To offset this, offering current employees bonuses and higher pay rates, if new employees are paid more, could be a reasonable approach. Therefore, focusing on one piece of compensation, such as sign-on bonuses, as the only solution, could create other issues in the total employee value proposition.