Signing bonuses

I'm just curious here, I've wondered this for a while.

It's a very competitive market right now for what I do, and it's become very common for companies to offer signing bonuses. But looking at what they're offering it doesn't  look like they really want to offer a signing bonus as much as they just want to say they're offering a signing bonus. In other words, what they're offering is pitifully low.

Or maybe it's just me, my expectations are not realistic. Then I saw one this morning from a major company, Pepsi, that I thought was right in the range.

So what is a reasonable signing bonus in a very competitive market? The job is industrial maintenance, what we call a millwright here. I'll post numbers later, just curious to hear responses

In reply to Peabody :

I have received signing bonuses twice. One was one week's salary, the other was one month's salary. Both companies were Korean, and the actual salaries were on the low end of the competitive range, FWIW. 

I'm distrustful of hiring bonuses, since it effectively reduces your salary for the future.

Easy numbers - let's say your salary is $50K and you get a $10K hiring bonus. Great for year one. Next year, your salary is back down to $50K, so you have a pay cut. Even if you get a 10% raise, now your salary is $55K and not $66K.

Plus, of course, what you say about "it doesn't  look like they really want to offer a signing bonus as much as they just want to say they're offering a signing bonus."

Was advising a coop last year looking for full time process engineer gigs. She got a salary of $85k with $5k signing bonus. That basically amounted to covering relocation costs as there were no provisions for that and got her moved and deposit on an apartment. I've heard that's how some companies are viewing it now for outside hires.

The manufacturing plant that I drive past has signs out front advertising starting pay in the $19-23/hr range with an $1800 signing bonus. These are USD, so you might need to consider the difference in currencies up in the Northern Annex.

I got a signing bonus two jobs ago. It was 5% of the salary. Salary was right in the middle of the competitive range. Each subsequent year I got a bonus of about 10% and a raise of about 2%.

I liked that company. In some ways I wish I never left, and have been trying to get back in there for a while.

BoulderG said:

I'm distrustful of hiring bonuses, since it effectively reduces your salary for the future.

Easy numbers - let's say your salary is $50K and you get a $10K hiring bonus. Great for year one. Next year, your salary is back down to $50K, so you have a pay cut. Even if you get a 10% raise, now your salary is $55K and not $66K.

 

Way back in the day, my wife was offered a raise or a bonus for the year.  We made sure she took the raise- as it paid for the bonus in 3 years.  And then gifted us for another couple of decades.  Let alone add to future percentage raises.

In reply to Peabody :

The bank my wife works for offers her a signing bonus of $10,000 if she recruits technically qualified applicants.   
     The kicker is technically qualified. They have to have the actual certification in order for her to receive the $10K.  The trick is the bank offers the certification free but it's not something you can just pass without the class training. ( again free). 
    Luckily it's a major pay raise for most people and since it's something that can happen in a long weekend.  It makes sense.  The bank Recruits  Americans. Pays them well,  near 6 figures to start.  and rewards people for finding good candidates. Plus it's a work from home situation.  
     Credit to the bank.  They can hire people in India for a small fraction of what they pay here.  Those women in India come to work early afternoon and stay until midnight  in order to communicate with American time zones.  But they have one bus to catch to have a safe trip home.  Rape and assault is far more common in India than here in America. 
   

mtn said:

I got a signing bonus two jobs ago. It was 5% of the salary. Salary was right in the middle of the competitive range. Each subsequent year I got a bonus of about 10% and a raise of about 2%.

I liked that company. In some ways I wish I never left, and have been trying to get back in there for a while.

       Often your work load increases dramatically when management changes as old bosses try to force out old employees so they can get new employees loyal to them personally.     Then bizarrely you can't get rehired once you've left. 

The youth in China are now staging a "Revolution"  which translates to let it rot.   They have struggled to get accepted into good schools and excel  at studies.   Then strive to get hired by good companies working 12 hour days 6 days a week. Only to get stopped by Covid.  Where they can't work and pay student loans.  
   The real estate they pay such high prices for cannot be occupied because it doesn't have windows, doors, plumbing, or electricity. ( Fein Schway sp reasons).  
      They can't move in anyway because the job they trained for isn't at that city.  
  During the one child rule as many as 70% of the children born were men leaving women  to be extremely selective about who they marry.   Good job and own real-estate .  Are absolute requirements.   
       Real estate holdings in China aren't actual land rights.  They are 70 year leases on a apartment.    
        Let it Rot and millions of young Chinese  are following that.  
 

In reply to frenchyd :

But do they offer signing bonuses with the 70 year lease?

My daughter graduated vet school last spring, went to Calgary, signed for $100k a year, and got a $10 signing bonus after 3 months.  Income taxes ate a reasonable chunk out of it, which was an entertaining conversation for me, as she has been a student/minimum wage type for the first portion of her life.  

"Why do I have to pay this?  Whats CPP?  Whats EI?"  (Canada pension plan and employment insurance for the non-Canadians).  I enjoyed those conversations with an entitled little socialist university student type.

Edit: $10k.

In reply to No Time :

13 paragraphs, and three posts, to say "my wife got a bonus"

5% of salary seems common for every year I've worked as an aircraft electrical/avionics engineer based only on my own experiences.

5% seems in line with my experience.

I didn't think of it as an income boost, but  viewed it as a way to offset some of what was being left on the table when leaving a previous employer (partial year bonus, RSUs, options, etc). 

I got a 4% signing bonus in late 2019 when I moved over to my current employer.  I was leaving towards the end of the year and walking away from a solid bonus from my employer at the time, so it seemed fair.  As someone else mentioned, a signing bonus is preferable to a higher salary from an employer's perspective, because they only pay it once.

 The place I worked at would pick up your student loans if you agreed to stay for 5 years.  Hmmmmm.   RPI = $58,000 X 5 years, OK I can stay.

03Panther said:

In reply to No Time :

13 paragraphs, and three posts, to say "my wife got a bonus"

And none of it related to the question asked.

So it seems like 5% is fairly common, maybe my expectations are a little high.

I was thinking  ~10% since the whole idea is that you're trying to convince people to apply for your job. I've seen a bunch at $1500, some at $1000, and some as low as $500, which is about day's pay. But I keep seeing those jobs advertised, so... The ad I saw this morning was for 10 grand, which I thought was more appropriate.

We are seeing these, offered pretty frequently in the veterinary industry. There are a lot of details to be aware of, as mentioned above.
 

The taxes can be significant, and if you don't stay for a certain period of time, the contract may force you to pay back the employer in their pretax amount. This can result in a substantial total loss to the employee! It can effectively be a form of indentured servitude.

Streetwiseguy said:

 and got a $10 signing bonus after 3 months. 

Do you mean $10k?

Peabody said:

Streetwiseguy said:

 and got a $10 signing bonus after 3 months. 

Do you mean $10k?

Oopsie.  Yes.

I've only ever gotten one.  When I signed on with my current employer over 20 years ago, I was thrilled that the offer letter said I'd be getting a $5000 net ( N - E - T) sign on bonus.  Almost unheard of at the time - and I wasn't expecting it.  But when they sent the check they had applied the standard withholdings reducing it to $2XXX.  I took my letter to HR and they said "hmmm.  The net part was a mistake".  Since I wasn't expecting it in the first place, I just let it go.

Never got a signing bonus myself - but when I worked at Nortel, they were offering an Audi TT as a finder's fee if you could find them an engineer for the fibre optic division.

Do you/can you travel overnight frequently?  If so we are hiring the right field service personel to work on industrial equipment.  Great place to work, pays well, new F250 or Ram 2500 service truck, all tools except hand tools provided.  Must be able to cut, weld, fabricate, and rig/install industrial equipment.  Bonus points if you also can do 3 phase electrical and controls.

That being said we don't typically offer signing bonuses.  If thats something you are seriously interested in email me at aacthree at gee-mail and I will get your resume to the right people.  

In reply to frenchyd :

That's not a signing bonus. That's a referral fee. 
 

A signing bonus is given to the new hire, not to an existing staff member.