After a few rounds of interviews, you have been offered a job and now is the time for negotiations.
Should you expect your future employer to offer a signature bonus? Or should you request a sign up bonus?
If so, how large should it be and what strings can be attached? Sign-up bonuses – one-time payments when an employee starts a new job – are common, but are not offered to all applicants.
Who gives signature bonuses? If you’re just out of school, the signature bonus isn’t ruled out, as we saw with employers who were supposed to be employed quickly towards the end of the Covid-19 pandemic, but it’s not given either.
In addition to the higher education market, employers typically use signature bonuses – which can be 5-10% of the average salary of salaries and professionals – to attract executives. Why do employers offer sign-up bonuses?
To assess your chances of negotiating a signing bonus, you should consider the reasons why employers use them:
Winning the Competition: The signing bonus is more likely when a company competes with other employers for the same employee, especially in areas where demand is strong, such as nursing, accounting, or technology. It may also matter if you are hurting a job or whether you are recruited by a company. If you were hired, it is a sign that the employer is really interested in you, so it can be a signature bonus.
Retaining internal payroll capital: Sometimes, especially in large companies, you only ask for a higher paycheck if you are told that it is outside the payroll area of the company. There can be much less flexibility in terms of pay, in which case the company can replace the difference – the first year – with a signature bonus.
Compensation Benefits: If an employer hires an experienced employee who loses the bonus or other benefits upon leaving the job, the employer can use the signing bonus to compensate for the difference. Should you get a sign up bonus? If you are offered a signature bonus, make sure you understand the terms. Some require you to pay the company back if you leave before a certain date – a date that can take months or even a year. Other companies really don’t give a check until you’ve been there for a while.
Lastly, note that a signature bonus is not always the best option.