No matter what you call them where you work—hiring bonus, sign-on bonus, signing bonus, whatever—bonuses issued with the purpose of converting candidates to employees are full of pitfalls. Yes, they can work when your candidate is on the fence about you and another opportunity, or when she knows her skills are in high demand, and you need to sweeten the pot to close a deal, but they should be a tool of last resort.
Candidates may feel great about getting a 5–25% bonus check but having to sign a scary-sounding contract detailing what’s going to happen if they leave too soon feels icky. Is that the right way to start a relationship? And if word gets out that signing bonuses were offered to some employees and not others? Well, that’s bad for morale. And what if you never needed to provide a bonus in the first place because the candidate would have accepted your offer no matter what?
Yes, hiring bonuses still have a place in your talent acquisition toolbox, but here are three recruiting incentives that offer a much better return:
Incentive 1: An Opportunity to do Meaningful Work
What’re a few extra bucks compared with the chance to do some work that matters? Without a basic appreciation for your role and everything that comes with it—things you should have established by promoting your recruitment brand through your candidate engagement efforts—any bonus money you issue could end up being but a distant memory to any unhappy employees who leave you after a year for another gig.
A better way to use those funds is to invest in the development of your recruitment brand—something that could bring a candidate’s salary and compensation expectations down. In fact, according to research conducted by Qualtrics, more than 67% of millennial job seekers say they’d be willing to accept a lower salary for a role that offers more opportunities for growth or a better work culture.
Incentive 2: A Complete, Holistic Understanding of Your Company’s Total Rewards
When a signing bonus is what it takes to get a candidate to choose your offer over one from another company, you need to examine how you’ve presented your opportunity. Did everything come down to an offer made a little bit sweeter by a one-time payment? If so, what went wrong? You and your competitor(s) may be exactly equal in terms of salary, retirement savings, and health and welfare benefits, but is there no way to distinguish your approach to paid time off, flexible work, and overall work/life balance? Are you really just offering the same opportunities regarding career development, personal growth, and advancement?
Speak with your colleagues about your total rewards or benefits team—and bring a writer from your marketing department with you. You need to zero-in on the things that make you shine so you can showcase them in all your candidate communication.
Incentive 3: Employee Referral Bonuses
If you’re going to issue bonuses, shouldn’t you do it in a way that reduces rather than increases your overall cost per hire? Investing in a strong employee referral program allows you to reward known quantities—engaged employees—instead of people who have yet to prove themselves. Your referral program can speed up your time-to-hire and create a general sense of goodwill in the workplace.