As a Professional Recruiter for the past 39 years, many clients decided to pass on an excellent performer because they were earning “too much money.” The hiring manager is very disappointed that we are not pursuing a top-level talent. In our conversations, I ask about utilizing a sign-on bonus.
Why Do You Offer A Sign-On Bonus?
Companies do not want to upset their salary structures – and that practice is totally understandable. When I coach my Career Transition clients, I coach them that it is the company’s responsibility to create and maintain their salary structure.
As a company, it is important to understand the company’s needs. How are you measuring success with your current employees? Once you understand the level of contribution each team member makes, the hire/no-hire decisions and compensation on new candidates become easier.
Occasionally, especially during a time with many reductions in force, a top performer lands an interview with your company. Does your staff have the ability to recognize a top performer? Companies with managers who are not top performers may suffer from one of two maladies:
1. Those managers may not recognize the contributions a top performer may contribute (especially if those managers have not been trained how to effectively interview).
2. Worse, those managers may recognize the talent but not want to be threatened by that candidate’s abilities if they hire them (and make them look bad).
As a Talent Attraction consultant, I have seen both situations. Neither benefits your company.
Let us say that everyone, who interviews this candidate, agrees that they want to hire that person. Unfortunately, the candidate is currently earning $10,000 more than this open position pays.
Enter The Sign-on Bonus
Since, in most companies, the salary compensation and the bonus compensation come from different financial buckets, this is a tool that enables the company to hire Top Talent and measure their performance over 6 months to a year.
The biggest advantages of this tool are it may attract Top Talent while it preserves the integrity of the salary structure for the company as they measure the impacts of the new employee.
Most people today live at their current earnings and are loathe to accept a $10,000 cut in their income. Secondly, there is a reason the top performer was receiving a higher level of pay.
The sign-on bonus tool enables the candidate to keep their earning intact for the first year of employment with the new company. As they work that first year, measure their productivity and contributions to their team and company. Then, if their performance is deserving, give them a promotion, a raise, or keep them at their current salary with their peers.
If your company finds it needs to give everyone a sign-on bonus to attract them to work for you, it is time to examine your compensation. Also, like it or not, the word gets out in the community – “Don’t accept their initial offer. They will add a sign-on bonus to their offer.”
My counsel to clients is to extend their best offer (where the candidate fits within your structure). If the candidate is a top performer, consider utilizing the Sign-on Bonus tool to land them.
This Sign-on Bonus tool enables your organization to upgrade your team’s talent and win the Talent War.
If you have any questions, please call me at 435-714-4425 (Mountain).
The RecruiterGuy.com Top Talent Attraction business model is my differentiator. I focus on one client at a time and charge a flat monthly fee. This model enables me to attract new talent to your organization while identifying and suggesting improvements to your company’s Talent Attraction process, including Manager Interview Training. https://recruiterguy.com/
Learn how I coach my Career Transition Clients in my most recent book – Employee 5.0: Secrets Of A Successful Job Search In The New World Order http://amzn.to/2D9w39f My book includes an appendix with action verbs and sample interview questions.
I help organizations Recruit, Onboard, Actuate, and Retain Top Talent.
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