The talent crunch is holding businesses back…and they know it. The skills shortage negatively impacts service and product quality. Still, over half (54%) of businesses struggle to find the right talent. Although this is bad news for employers, it represents a good opportunity for skilled, experienced talent.
Faced with stiff competition for the best people, many employers are willing to pay a premium for the industry expertise they need, potentially even offering a signing on bonus as part of the deal. Our recruitment experts tell you everything you need to know about how to ask for a sign on bonus, what it is, and which candidates are most likely to get one.
What is a sign on bonus?
A sign on bonus (also known as the 'golden hello,' a joining bonus, and a signing bonus) is a financial incentive offered to in-demand talent. Employers use these bonuses to secure desirable candidates, ensuring they don’t accept an offer from a competitor. Sign on bonuses are usually offered alongside the existing benefits package, but they often come with their own terms and conditions (such as staying with the company for a specified number of years).
Are sign on bonuses common?
What determines whether you can secure increased wages, a sign-on bonus, or other benefits? Essentially it is supply and demand. If you can provide a service that few other people can, there will be greater competition to hire you, pushing up your value and, in turn, earnings capacity. Conversely, if you've got no specialism to offer — and an employer has various other candidate options — you've got limited bargaining power regarding contractual terms.
Related: How to negotiate a higher salary
If an employer needs you more than you need them, you can push further on pay and benefits. Assuming multiple organisations are chasing your signature, you can opt for the most lucrative offer. Having spent years developing skills and expertise and becoming a specialist in your profession, why shouldn't you maximise your income?
Industry-specific talent
‘Golden hellos' are more common in some industries than others. They are typically paid to senior-level professionals but could be available to any in-demand job candidate — depending on how highly their services are valued. Suppose you're a much-coveted professional with several career options. In that case, employers may consider this joining fee a small price to pay for your services. If the alternative is to see you walk away from negotiations and join another firm, they may be happy to pay the extra cash sum.
Special circumstances
There are a few other instances where employers may be willing to offer a sign-on bonus. Firstly, a cash sum could be paid to secure someone for an earlier start date. For instance, if a candidate gets their bonus paid out in February but a company wants them to start in November, they may pay the candidate the sum they have sacrificed by switching jobs.
Similarly, if a candidate has equity in their current business, and this will be forfeited by moving, the new employer may offer a cash sum as compensation. A third scenario could be where an employee is due a redundancy package, but the new employer wants them to leave before this is paid out. By offering the equivalent sum, they may encourage the individual to waive their right to redundancy pay.
How to tell if you qualify for a sign on bonus
As a job candidate, you need to weigh up your prospects of securing a bonus before asking for one. If you feel fortunate to have been offered a particular job — perhaps due to the level of competition for the role or the fact it is a higher grade — this might not be the time to push your luck.
Where employers have other options and several talented applicants waiting for a job offer, they may take a 'thanks, but no thanks' attitude towards your request. Having misjudged your standing — and over-estimated your potential value to the hiring organisation — you could see the job offer disappear right before your eyes.
It's all about looking for clues — signs which indicate whether you are in a strong or weak negotiating position. For instance, how eager was the employer to get you to interview? How much effort have they made to sell the organisation to you? Has the employer hinted at a willingness to negotiate on pay? Employers will aim to avoid paying bonuses where possible, but if in-demand candidates request them, they may be used as an acquisition tool.
How to ask for a signing bonus
If you've emerged as the preferred candidate in a recruitment process, you're in a strong bargaining position. By making a job offer, the employer has expressed their desire to bring you on board, which is to your advantage when negotiating terms. Knowing that the employer is eager to appoint you, it may be possible to secure a higher salary, improved benefits, or even a sign-on bonus.
If you think an employer is willing to offer a 'golden hello', you've got to ask for one. This might not always be a comfortable conversation, but it could prove to be a very profitable move.
It's important to test the waters rather than go in all guns blazing — ask whether the employer would consider paying a one-time bonus rather than specifying it as a condition for accepting the role. Attempting to negotiate too aggressively could alienate the employer and cause them to withdraw the offer altogether.
One way to increase your chances is to provide evidence of previous bonuses, as evidenced by your P60 and the key performance indicators you have worked towards. Employers may be willing to match historical payments in order to meet your remuneration expectations. Providing evidence of the financial value you have added to organisations in the past may also be helpful - it may convince the employer that the sign-on bonus is worth paying.
Related: When should you discuss salary in an interview?
7 top tips for unlocking a sign-on bonus
1. Do your research on the market and your prospective employer
2. Assess your chances of success in securing a bonus; don't jeopardise your job offer 3.Decide what you are happy/willing to accept as a bonus
4. Pick the right opportunity to raise the issue - always agree salary and other terms first
5. Be polite, respectful and courteous in negotiations
6. Remain flexible; you may have the chance to secure other benefits, if not a cash sum
7. Where possible, allow a recruitment agency to lead negotiations
Using a recruitment agency
The recruitment consultant should have an idea as to whether the employer is willing to offer a bonus and what sort of figure will be available. If they are not party to this information, they are in an ideal position to speak to their client and find out on your behalf.
Working as an intermediary, the recruiter can negotiate for both parties and arrive at a figure everyone is satisfied with. By delegating this role to a specialist consultant - someone with knowledge of the jobs market, industry, the client's outlook, and pressure points — you can spare yourself an awkward conversation with your new employer. If they are unwilling (or unable to offer a bonus) the recruitment consultant can simply relay this information back to you.
Robert Half is a leading executive search agency. Send your CV to a specialist executive search consultant, or if you are looking to hire senior leadership talent, tell us your hiring needs.
