A recent study conducted by the American Compensation Association (ACA) reported that 60 percent of 625 surveyed employers currently use sign-on bonuses to help them recruit for a wider range of positions.
Following are highlights from the survey of those utilizing sign-on bonuses:
• A flat dollar amount, not tied to a percent of base pay, is awarded by 84 percent of the organizations.
• Over 80 percent offer sign-on bonuses to upper and middle management, with 73 percent offering bonuses to both professional and technical staff positions.
• Of those that offer bonuses to upper management, 67 percent pay bonuses over $10,000.
• Clerical hire bonuses range from $1,000 to $4,999 in 54 percent of the organizations.
• Over a third of the organizations split the payout between the hire date and a specified length of service.
• Approximately 65 percent of the organizations require employees to forfeit or pay back the bonus if they leave the organization within set time frames.
Overall, approximately 88 percent feel the sign-on bonus program helps with attraction and recruiting issues.

In this “employee’s” market, sign-on bonus programs allow organizations to offer additional financial incentives to sought-out candidates, without forcing them to go outside their established salary guidelines.

In addition to improving recruiting efforts, sign-on bonuses also help temper internal pay equity issues. Because a sign-on bonus is a one-time payment not tied to base pay, employers may not be forced to hire an employee at a higher base wage than current employees in the same job.