WSJ Your Money Briefing - Landing a Signing Bonus—Even if It’s Not Advertised

Episode Date: September 24, 2024

Many companies are offering signing bonuses to seal the deal with qualified candidates. Wall Street Journal reporter Ray A. Smith joins host J.R. Whalen to discuss how to ask for one. Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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I'm JR Whalen for The Wall Street Journal. The competition for workers may not be as red hot as it was a few years ago, but some companies remain desperate to land qualified candidates. Career experts say workers still have leverage, and in many cases, they should ask for a signing bonus. A company won't necessarily volunteer that you can get it or that they'll offer it. So it's really incumbent on the candidate, if they're not especially told that there will be a signing bonus with this job to ask. We'll talk to Wall Street Journal reporter Ray

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Many employers don't advertise signing bonuses but are willing to pay them for the right candidates. Wall Street Journal reporter Ray Smith joins me. Ray, help us with the basics for just a moment. What is a signing bonus and why do companies offer them? A signing bonus is basically a financial incentive. It's money paid upfront to sweeten the deal. Companies offer them to entice highly sought after candidates that they're in discussions with or to woo them away from rivals.

How would a job candidate know if a signing bonus is potentially involved? Is it typically part of the salary terms listed on a job posting? In some cases, a job posting will state that there is a signing bonus. But in other cases, companies often keep quiet about those payments. They're betting that new recruits won't even think to ask for one.

So is this sort of a don't ask, don't pay type thing? Yes, it is. Basically, if you do not ask for one of these, a company won't necessarily volunteer that you can get it or that they'll offer it. So it's really incumbent on the candidate if they're not explicitly told that there will be a signing bonus with this job to ask. So it is appropriate for a job candidate to ask for a signing bonus or at least ask about

it. It is really appropriate for a job candidate to ask about it. It is really appropriate for a job candidate to ask about it. Either is there a signing bonus or is there the potential for signing bonus or how about a signing bonus. It should be part of the conversation. How should they make their case that they should get one? Do some research on how long the position has been available because that'll tell you how desperate the company is to hire someone new and that gives you a little more leverage because you know there's a clock and there's a window and there's a real big need.

The other thing is to look at comparable salaries for whatever the going weight is because that can give you leverage to ask for more. And you can also talk about what you may be leaving behind in terms of the job you're leaving and if they can make you whole. So that's another way to make your argument for the case of why if I take this job, it's gonna set me back financially this way. So you wanna make your arguments

on a number of different levels, but you wanna make sure that you have your research done before you make those cases. Signing bonuses used to be a lot more common than they are today. Why did they largely go away? They went away largely because the job market had cooled and employers felt like they didn't have to resort to giving out signing bonuses in order to attract candidates. When the number of candidates

started to outnumber the number of openings, the ball was in employers courts and they no longer had to woo candidates with signing bonuses. So that's why they went away. Which types of jobs still have signing bonuses attached? We found jobs specifically in healthcare, civil engineering jobs, cybersecurity engineers, licensed financial professionals in insurance,

airplane mechanics, so it really is all over the map. But one thing that these fields and these jobs have in common is there is a specific skill set that these people have or that these jobs demand. And so not many people will have some of these crucial or unique skill sets. So that's what makes them appealing for companies to give a signing bonus to. If a company is open about talking about a signing bonus, when would the job candidate expect it to come up in the process? During the negotiations, where we're hatching out the deals and the salary and starting dates and all that,

that's when a signing bonus should come up. Whether a company explicitly says that they're available or if you're bringing it up, you make sure to bring it up when you're close to signing the deal. Is the bonus completely separate from an employee's starting salary? A couple of people I talked to for the story told me that it should be considered as part of the salary in terms of when you're negotiating salary and you should base your ask for a signing bonus based on what the base salary is and what I mean by that is one person told me they basically asked for at least 10% of their base salary for the signing bonus and that was when they were in discussions about what the total compensation package will be. But just to

use round numbers for a second, let's say a job someone's going for pays $70,000 a year. Would the company carve out, let's say $5,000 from that and pay them upfront in the bonus? Or would a $5,000 bonus be paid on top of the $70,000 salary? It'll be considered additional income beyond the base salary,

but it would be paid upfront at the start of the job. Is it taxed? Yes, it is taxed. So people really need to be mindful of that. By offering signing bonuses, the companies put themselves in a tough position because their existing employees would see, oh, this new person coming in is getting a signing bonus and I'm not getting anything on top of what I'm getting. That is a big risk that what you start seeing is these internal pay equity discussions where

people who've been there for a long time or been there at least for a couple of years or even months see this new person getting this shiny bonus on top of their pay and that they didn't get when they started either because they didn't ask or they weren't offered. And so you get to people feeling like this is really unfair and not justified. And so that can create some drama among colleagues in the workplace. This is the tricky spot for the job candidate, because if they don't ask for it,

they may not get the bonus. If they do ask for it, could they possibly be seen as being greedy? Absolutely. A candidate could run that risk. It could jeopardize the offer if the employer feels like the candidate is asking for way too much. So it is a careful thing that candidates have to be aware of. But on the other hand, they really should not let that keep them from asking because they could potentially be leaving a lot of money on the table if they don't bring it up.

That's WSJ reporter Ray Smith. And that's it for your Money Briefing. This episode was produced by Zoe Kalkin with supervising producer Melanie Roy and development producer Aisha Al-Muslim. I'm JR Whelan for The Wall Street Journal. Thanks for listening.