Why do companies throw money at people who haven’t even started working yet?
As the world begins to step out of the restrictions and challenges we’ve faced due to a global pandemic, we are met with new ones. Acquiring skilled candidates for vacant jobs is at the top of that list for many companies across the globe.
Traditionally, a signing bonus was a great way for companies to close the gap between what they were able to offer salary-wise, and what a candidate’s expected compensation may be.
At the beginning of 2022 however, signing bonuses are being utilized in order to just attract candidates, with the average signing bonus for management or supervisory roles being approximately $7000 CDN*.
“Skilled professionals currently have access to more career opportunities and power in the hiring process than ever before,” said David King, Canadian Senior Managing Director of Robert Half.
A recent study by Robert Half has estimated that singing bonuses will be offered by 30% of Canadian companies to attract talent for roles in the first half of 2022.
The question now is – how will this look long term? After the first year or so, once the bonus payments are exhausted, an employee will likely seek out opportunities in order to receive what they initially desired, in addition to other criteria perhaps not offered originally. If they are unable to find that opportunity with their current employer, they may look elsewhere.
Another study done in 2014 found that employees who were offered a signing bonus in a tight labor market, as we face right now, did not trust their new employer or work as hard as an employee who was offered a signing bonus and hired in a weak labor market.
So, we have to think about the main goal of a signing bonus. Is it to attract candidates, close candidates, or help get better employees who perform at a higher level?
We are not signing free agents in major league sports, we are finding long-term employees and maybe we should offer different attraction incentives. Let’s try a couple on for size?
– Relocation Bonus!
– Executive Coaching Bonus!
– Settling in Allowance of 5k!
– Free Friday Dinners for Your Family Bonus!
– 0% Mortgage Bonus for your first year!
– Educational/MBA Training Bonus!
Each of these offers contributes to sustained employee satisfaction, and they can all be six-month and/or low-cost incentives. Additionally, some may be offered to existing employees who missed out on a signing bonus option.
For example, the consulting firm KPMG Canada has given its employees an extra 7 paid days off during July and August 2022, which will make every weekend a long weekend for those 2 months.
What strategies will your business utilize for hiring during 2022? I would love to hear your thoughts on this subject!
Resources:
https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/signing-bonuses.aspx
https://www.consulting.ca/news/2756/kpmg-makes-every-weekend-a-long-weekend-in-july-and-august
*amount based on 50 advertised jobs found on Indeed and Workopolis; as of 22 February 2022.
Kael Campbell is President and Lead Recruiter of Red Seal Recruiting Solutions, a company providing recruitment services in mining, equipment and plant maintenance, utilities, manufacturing, construction, and transportation. When he is not recruiting, Kael spends as much time as possible with family in the great outdoors and on the water. He volunteers his time as a Board Member of the Entrepreneurs Organization of Vancouver Island. We have a wide variety of services to help you find the best employees. See how we can help on our Recruiting Solutions page.