Skip to main content

Return of the signing bonus

By Laura Morsch has a business partnership with, which serves as the exclusive provider of job listings and services to



Enter Keyword(s):
Enter City
  More Options



Rarely seen since the dot-com boom, signing bonuses are making a comeback -- sort of.

From the late 1990s until 2001, the national unemployment rate hovered around 4 percent. With business booming, employers pulled out all the stops, making sky-high salaries, stock options and signing bonuses the fundamentals of offer letters.

"Back in the late '90s, companies felt they needed to move (on hiring a candidate) right away," said Dave Sanford, executive vice president of client services for Massachusetts-based contingency placement firm Winter, Wyman and Companies.

But when the country plunged into recession in 2001 and tightened the job market, fewer companies offered signing bonuses to new employees.

Now that the economy is improving, Sanford says he is seeing this incentive start to trickle back into compensation packages. But although hiring bonuses are up across most industries, they're still the exception.

Sanford estimates that around 5 to 10 percent of his clients are offering sign-on bonuses, up from about 2 to 3 percent a few years ago.

"We were in such a deep recession in 2001 and 2002 that companies have been very conservative about throwing money around," he says. "Even now that the market's getting better, they don't want to be reckless. Everybody's still watching their bottom line."

The decision to offer a sign-on bonus often boils down to supply and demand. Working in a hot industry or in-demand position can boost a candidate's likelihood of getting a bonus upfront.

For example, the 2006 Culpepper Trends Survey on Hiring Bonuses indicated that half of all technology and life sciences companies use signing bonuses to attract candidates, with payouts ranging from $1,000 to $10,000.

Other times, hiring bonuses are offered when a candidate would have to leave something behind to join a new employer, says John Touey, a principal with Philadelphia-based retained executive search firm Salveson Stetson Group.

"(One example is) if they are leaving mid-year or later in the year and feel they have earned a significant amount of the annual cash bonus, or they have options coming due in the near future that they will forfeit," he says. "...In other cases I have seen signing bonuses as a one-time consideration when the hiring company cannot match the annual base salary of a candidate."

To improve your chances of landing a signing bonus, heed these tips:

1. Know what to expect: Research the company and your industry to see whether your position or company frequently awards hiring bonuses. The Internet, industry contacts and current workers at your future employer are valuable sources of information.

2. Delay the money talk until after you get an offer: Wait until you have a written job offer before negotiating a sign-on bonus. Asking too early could make you appear difficult or greedy.

3. Be upfront: Employers are more likely to offer a sign-on bonus if accepting the offer would cause a candidate financial hardship. If you would have to forego your year-end bonus or triple your commuting costs, say so.

4. Make sure you understand the terms: Employers are increasingly tying a longevity clause to hiring bonuses. Find out if you will need to pay back part or all of the signing bonus if you leave before a specified period of time.

5. Remember that a signing bonus is a one-time deal: If a company is offering a salary that seems too low, a signing bonus will only make up the difference for one year. Negotiating a more reasonable salary will have a long-term impact.

© Copyright 2005. All rights reserved. The information contained in this article may not be published, broadcast or otherwise distributed without the prior written authority
Story Tools
Subscribe to Time for $1.99 cover
Top Stories
Get up-to-the minute news from CNN gives you the latest stories and video from the around the world, with in-depth coverage of U.S. news, politics, entertainment, health, crime, tech and more.
Top Stories
Get up-to-the minute news from CNN gives you the latest stories and video from the around the world, with in-depth coverage of U.S. news, politics, entertainment, health, crime, tech and more.

© 2007 Cable News Network.
A Time Warner Company. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines. Contact us. Site Map.
Offsite Icon External sites open in new window; not endorsed by
Pipeline Icon Pay service with live and archived video. Learn more
Radio News Icon Download audio news  |  RSS Feed Add RSS headlines