May 2000

A recent American Compensation Association e-mail survey of 625 employers found that 60% have some sort of sign-on bonus program and 88% of those who do believe that fact is helping them attract better applicants.

Most of the companies, 84%, pay new hires a flat amount while 3% provide a percentage of the job’s base pay. Thirteen percent of the employers offer both.

Only 40% of the respondents pay part of the award at the time of the hire and the remainder after a specific period of time, meaning the rest of the companies offering sign-on bonuses put the cash on the table on day one.

Almost a third of the companies offering sign-on bonuses to upper management, middle management, supervisors and professional or technical staff have no forfeiture or payback clause if the new employee leaves before a certain date. Almost as many employers require employees in the above groups to forfeit or return a portion of their sign-on bonus if they leave within one year.

Interesting: clerical workers, although offered sign-on bonuses much less frequently, have better odds of keeping their bonus. Forty-four percent of the companies surveyed have no bonus forfeiture rule for clerical staff and among employers who do, only 25% insist that admin assistants stay with the company a full year.

More than two-thirds of the companies surveyed offer sign-on bonuses of $10,000 and up on upper management positions. A middle manager’s sign-on bonus would likely be $5,000-9,999 while today’s range for professional and technical staff is $1,000-$4,999.