Understand the conditions of your sign-on bonus. Related Articles. Browse articles by Find The Right Career Path. Professional Development. Most Recent Jobs. See More Jobs.
Close Looking for the right fit? Sign up to get job alerts relevant to your skills and experience. Enter Your Email Address Warning goes here. A signing bonus is an amount of money a company gives an employee who has accepted their job offer.
Companies offer signing bonuses to attract well-qualified employees and convince them to accept a job. The bonus is in addition to the employee's salary, benefits and other bonus or commission opportunities. Signing bonuses can be:. When an employee accepts a job with a signing bonus, they typically sign an agreement explaining the amount of the bonus and when and how it gets paid. Signing bonuses are common in the financial, sports and entertainment industries hoping to attract the best talent right out of college.
However, any company can offer one. Employers offer signing bonuses to entice employees with certain skills or qualifications to work for them. These reasons include:. Companies that can't afford to meet a qualified candidate's salary requirements might supplement their job offer with a signing bonus. Giving a prospective employee a one-time bonus payout can encourage them to accept the job even though it pays less than they want.
That individual might value receiving a large amount of money upfront if they are paying off a loan or need to make a big purchase. The company benefits because they stay within their salary budget and only have to pay the bonus once. If a prospective employee risks losing an existing or expected bonus, paid time off or other benefits by leaving their current job, the hiring company might offer a signing bonus to compensate for those losses.
Companies might recruit outside their city, state or region to find job candidates with the skills and experience they need. Candidates who live elsewhere, however, might be less likely to accept a job that requires them to move. Relocating is a big decision that can involve buying and selling a home, moving expenses and starting over in a new city.
In this scenario, the company might offer a signing bonus that covers the employee's cost of relocation to encourage them to accept the job. The most talented prospects in an industry usually receive multiple job offers. If a company suspects a candidate is in high demand or an individual has communicated that they have other job offers, a company might provide a generous signing bonus to get the candidate to accept their job offer over others.
This is particularly common when hiring recent college graduates who show a lot of promise. Many companies want to attract the most talented young professionals into their organizations at the entry-level and invest in their future. Some industries have a small population of qualified applicants to fill open jobs. For example, if you would need to buy a new car because of a longer commute, you might ask for a signing bonus to help with the down payment. However, there may be a reason to approach the negotiation with caution.
Be aware that employers sometimes offer signing bonuses strategically. From your perspective, you will do far better financially over the course of your career if you can manage to convert that signing bonus offer into a higher salary. Thus, when offered a signing bonus, you might use the offer to renegotiate salary. I believe this demonstrates my long-term commitment to the organization.
If the employer is open to this possibility, they are likely to make a counteroffer. If an organization wants to hire you, it may adopt a short-term mindset and pay you less now in exchange for potentially more later on. Click here to cancel reply. Your email address will not be published.
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