Checking References: Why and How To Check References for Job Candidates
/
Learn why references are such a crucial element of the hiring process as well as how to check references for job candidates for your next hire.
Read More
Hiring for Soft Skills: What To Look for in Your Next Hire
/
Hiring for soft skills is less straightforward than hiring for hard skills or experience. Learn how to evaluate soft skills in your hiring process in this blog.
Read MoreHow To Avoid the 5 Most Common Hiring Mistakes We See
/
We’ve compiled our tips for avoiding the most common hiring mistakes we see so you can improve your hiring process and find best-fit candidates.
Read MoreRed Seat Celebrates 25 Years: How Hiring Has Changed and Our Future Predictions
/
In this blog, we’ll take a stroll down memory lane to look at how Red Seat began, how hiring has changed, and our predictions for the future of hiring.
Read More5 Key Hiring Trends We Expect To See in 2024
/
Thinking of bringing on new employees in 2024? You’ll want to read this.
Read MoreYour Top 8 Most Commonly Asked Hiring Questions … Answered!
/
We’ve compiled your most commonly asked hiring questions, plus a few of the top questions we’re asked about working with Red Seat.
Read More6 Ways To Leverage Your Unique Company Culture in Your Hiring Process
/
Company culture is key to finding employee and employer job fit. Here are 6 ways to leverage your unique company culture in your hiring process.
Read MoreThe Difficulty of Hiring One Person for Two Jobs
/
Many companies try to cover two jobs with one new hire. While it can seem like a good solution to hire one person for two jobs, it’s not ideal. Here’s why.
Read MoreHiring Bonus: What’s Good for the Employee Should Also Be Good for the Company
/To offer a hiring bonus, or not to offer a hiring bonus: this is the question.
For some industries, hiring or sign-on bonuses are common; for others, they are less so. And in some cases, it depends entirely on the position.
If you do choose to offer a bonus for your open position, it’s important to make sure it’s both enticing to the prospective employee and beneficial for your company. Let’s look at some cases where a sign-on bonus makes sense, as well as some tips for creating bonuses that are mutually beneficial.
Why Offer a Hiring Bonus?
A sign-on bonus can be a valuable addition to a compensation package in many instances. For example:
To attract candidates to an open position
If you’re struggling to find candidates for your position, offering a bonus can make it more attractive. This is particularly effective if the candidate pool is small or if a bonus is not typically offered in your industry.
To bridge the gap between expected base pay, earned commission, or anticipated bonuses
For example, say you have a candidate seeking total compensation of $150k, and your position is structured for a $100k base salary plus $50k in bonuses. However, because of your ramp-up time, the employee won't hit that amount until 6-12 months after they start. A sign-on bonus can help bridge that gap.
When you’re competing with another offer
If your ideal candidate is considering multiple job offers, a sign-on bonus can help entice them to take your position.
To compensate for something you don't offer
For example, if you don’t offer as much vacation time or other benefits as the competition, an up-front bonus can help make up the difference.
When you don't want to add to your ongoing salary expense
A sign-on bonus is a good way to offer the compensation a prospective employee seeks without adding to the employee’s salary on an ongoing basis.
To cover a waiting period
If the potential new employee will have to wait for benefits to kick in (like health insurance, for example), a sign-on bonus can make up the difference during that waiting period.
To make up for something the candidate is giving up by coming to your company
If the candidate will miss collecting on a bonus at their current job or take a cut in pay or benefits if they choose to take your open position, a bonus up front can help compensate for that loss.
Best Practices for Creating a Hiring Bonus
Here are a few suggestions to help you create an effective sign-on bonus offering and avoid some common mistakes.
Prepare in advance
Determine specific terms for your bonus program, and stick to them. For example: decide if you’ll require a minimum time commitment within which the employee will have to pay back the bonus if they leave. Also determine when and how you’ll pay the bonus: in one large lump sum, or in smaller payments spread out over the first year, for instance.
Stay on budget
Calculate how much you can afford to offer within your hiring budget. While your bonus should be competitive, it also needs to be affordable.
Spread out the bonus over time
Pay the bonus in smaller installments over time. Spreading out the bonus helps limit your risk. For example, paying a $10k bonus up front can backfire if the person leaves two months into the job. By spreading the payments out over time, you’ll have less to lose if they decide to leave.
Keep installment payments to a reasonable timeframe
Carefully consider the time frame in which you’ll pay out the bonus. A year is a good benchmark. Much less than that, and you risk too much loss if the employee leaves; but if you spread it out longer than a year, the bonus loses its allure.
Offer a big enough bonus to make it attractive
There’s no set formula to determine the right amount for a bonus, but it should be commensurate with the position and large enough to draw candidates. For example, offering only $500 for a $100k position is far too little. The bonus offered should be dependent on the position, salary level, and how difficult it is to fill the particular job.
We hope these tips help you create a hiring bonus that attracts great candidates and suits your company’s needs and budget.
Looking for more hiring tips? Follow Red Seat on LinkedIn.
How Your Candidate Pool Impacts Whether You Hire In-Office, Hybrid, or Remote
/
Whether you hire in-office, hybrid, or remote for your position will depend on many factors, not the least of which is the candidate pool you’re choosing from.
Read MoreOffer Accepted: 7 Tips To Make Your Onboarding Process Smooth Sailing
/
Without a solid onboarding process, your employee performance and retention can suffer. Read on to learn how to make your onboarding process smooth and effective.
Read MoreWhy You Need To Speed Up Your Hiring Process + 5 Proven Ways To Do So
/
To hire great employees, you need an effective, streamlined process. Here are a few ways to speed up your hiring process without compromising quality or thoroughness.
Read MoreTop 8 Interview Must-Do’s (and Don'ts) for Managers
/
To attract top candidates and make a good first impression in this employee-driven market, consider implementing these top interview must-do’s and don’ts.
Read MoreWhat Is Monthly Fractional Recruiting? Get To Know Red Seat's Exclusive Service
/
Learn all about Monthly Fractional Recruiting—a unique service found only at Red Seat!—and how it can meet your hiring needs and benefit your business.
Read MoreWhat Is Most Important to Today's Job Applicants?
/
Today’s job applicants know what they want in a job, and are unlikely to settle for less. If you’re on the hunt for new talent, here’s what to consider as you hire.
Read MoreRed Seat Spotlight
/
What do you get when you mesh an entrepreneurial drive + 23 years HR experience + a love for stories? Answer … The history of Red Seat.
Read MoreSpecial Feature: Recruiting in a Competitive Market
/
Abra Kadabra Environmental Services recently featured Talley at Red Seat on their Thoughtful Leadership Series.
Read More5 Things You Need To Know Before Starting Your Next Hire
/
To help you recruit top candidates, we’ve put together a list of things you should know before starting your next hire. Read on to learn these hiring best practices!
Read More
