UPFRONT Sign-on sweetners?

Offering new employees special bonus payments to sign on is trend that’s re-emerging in the United States as employers step up efforts to attract top talent.
That’s according to futurist Roger Herman who says that the hiring bonuses that were regularly used in the late 1990s are again expected to become commonplace as labour markets tighten – and that’s not just at the top end of the labour market. Even lowly gas station attendants and fast-food sellers have been lured with front-loaded pay – trend that could prove costly for employers, warns Herman.
What about New Zealand where skill shortages are becoming endemic?
Sign-on sweeteners are used but only for strategically important or senior roles, according to Gaulter Russell principal James Brooke.
“It’s not widespread practice but does happen, mainly for senior management roles though it can be used at lower levels where there is strategic significance to the appointment.”
For instance where critically needed skill is in short supply, candidates may be offered an inducement to move from their current role. Sign-on bonuses can also sometimes be offered as means to avoid parity issues inside the hiring organisation.
Such bonuses may be offered by way of shares rather than cash payments, says Brooke.
“These might include two-year stand-downs so the shares only become relevant when the employee has been there that long – that ticks several boxes.”
He thinks such sweeteners may become more mainstream as organisations become more commercially oriented to market dictates.
“Where there are skill shortages, employers have to be more flexible around the packages being presented to attract the calibre of staff they want, and sign-on bonus is part of that. But I don’t see it becoming widespread practice in the near future.”

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