Signing bonuses

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.

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."

I really don't see it this way. 
 

A signing bonus is not a substitute for salary. It's a bonus. It's a recognition that "We know you will have to make some big changes to come work for us, but we would like to have you. We'd like to offer you something to help make those sacrifices a little easier, so you can make the choice to work with us".
 

You still have to negotiate for a decent salary. 

I've never gotten a signing bonus. Not even sure it's a thing in my industry. 
 

I have received bonuses. Every year I've worked for this company. They are 5-8% of my salary, but they are completely at the company's discretion. It's a gift. Not my salary. 
 

My budget is based on my salary. Only. If the company was unable to offer a bonus one year, it wouldn't affect my budget and expenses. And it wouldn't effect my decision to keep working here. 

SV reX said:

I've never gotten a signing bonus. Not even sure it's a thing in my industry. 
 

I have received bonuses. Every year I've worked for this company. They are 5-8% of my salary, but they are completely at the company's discretion. It's a gift. Not my salary. 
 

My budget is based on my salary. Only. If the company was unable to offer a bonus one year, it wouldn't affect my budget and expenses. And it wouldn't effect my decision to keep working here. 

Wish I could get my dear old Uncle Sam to see it that way.

A signing bonus is just to try to tip you into accepting the offer. It's as low as the company thinks you'll accept. It's no different than a car dealer giving you a cash rebate or free undercoating. 

An annual bonus can be a good performance incentive IF the employee feels they can do something to affect it. If it's just "we decided to give you $500 because we read a book that said it would help morale", it is money wasted by the company. I have received one legitimate performance bonus - in 1998 - and a number of pointless unpredictable ones. I remember the performance one. 

In reply to A 401 CJ :

It's still income.  It's just not a guaranteed salary.

In reply to A 401 CJ :

Uncle Sam makes no difference. Bonuses are still taxable. 

In reply to Keith Tanner :

I agree, it's to help steer you towards accepting an offer, but I don't agree with the analogy of auto rebates is accurate. 

In my experience the signing bonus has been used as a way to offset non-salary income at a current position that may be given up to take a new role. 

The market demand for a certain skill set drives the salary offer, and while companies want to avoid paying more than necessary it is possible to get a salary increase as well as signing bonus. The salary increase may still be substantial, but depending on the industry and career level people can be leaving money on the table that isn't salary and may be partially offset by a signing bonus.

Some examples include starting midway through the year may mean being eligible for only a prorated portion of the performance bonus for that year at the new company, and if leaving a position that has consistently paid bonuses, then there is money given up to take the new role that isn't really salary.

There can also be unvested stock awards and other non-salary income or equity that may be given up. 
 

I revived my first signing bonus this year as a part of moving to another company. I'm in sales and we had a pretty good compensation negotiation and in the end they offered me a 10k bonus. I had decided to join the company but this did make me more comfortable. 

In reply to No Time :

Ive been on the side of offering the sign on bonus. We did not use it to compensate for unpaid salary. We were paying top of the market for the region, and it was a good place to work, I worked very hard on that. We were recruiting high performers already that other companies didnt want to lose, not people looking for a job. What we found was in many cases people are risk averse and dont like change. We could offer them more money and bring them in to meet the team and show them the culture, and many times it wasnt enough to pry them from the devil they knew, which was a good company that took good care of them. Saying Ill do all this better for you, BUT ill also put this amount of money in your hand just for giving me a chance to prove it, seemed to overcome alot of the risk aversion.