* Competition for top talent drives hiring bonus programs
In a sign that competition for top talent may be intensifying, half of all tech firms have some sort of hiring bonus program. A hiring bonus or sign-on bonus serves as an extra incentive to get a prospect to join a corporation or to obtain a particular skill in high demand.
A recent survey form compensation specialist Culpepper shows that 50% of technology and life sciences companies have a hiring bonus program in place, while another 3% intend to implement one. The remaining 47% have no program or plans to implement one.
The research finds that the practice of offering a hiring bonus is more common in larger companies. In particular, 75% of businesses with more than 5,000 employees offer such a program. Another 12% of large companies lacking such a program plan to implement one.
Compared to the hiring heyday of the late 1990’s, employers now primarily target top technical talent for sign-on bonuses as opposed to a broad range of positions. Executives and technical employees are the most likely to be offered hiring bonuses, with hourly/nonexempt and sales folks the least likely.
Bonuses are usually paid as flat dollar amounts rather than pegged to a percentage of base pay. Amounts range from $1,000 to $10,000. As you might guess, executives get the bigger bucks, according to Culpepper’s survey results.
It’s stay or pay at most companies that offer hiring bonuses, as 78% require an employee to forfeit or repay a portion of the hiring bonus if that worker leaves the company within a set period of time. A full 62% have a forfeiture policy of one year, 8% the first three months, 4% the first six months, and 4% an unspecified time period. The remaining 22% do not require departing workers to forfeit or repay the bonus.
