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4 Reasons Signing Bonuses Are Worth the Money Research shows that these incentives can sweeten the start for new employees.

By Heather R. Huhman Edited by Dan Bova

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Opinions expressed by Entrepreneur contributors are their own.


Signing bonuses are no longer just for athletes or CEOs of Fortune 500 companies.

Should the economy continue to improve this year, employers may be more likely to offer signing bonuses for new hires at every level.

The National Association of Colleges and Employers' job outlook for this year projected that companies will offer more signing bonuses to this year's graduates than for any other class since 2010: About half of the employers surveyed plan to offer signing bonuses, perhaps as high as $5,250 for graduates with bachelor's degrees.

When offering a signing bonus, consider these pointers:

Related: How I Handle My Bonus Responsibly

1. Be ready to make the investment up front.

To confer these one-time payments, employers must ensure they have enough funds to onboard new hires.

Signing bonuses can be offered immediately after hiring a candidate as a lump sum or as an award over a period of time.

A study released in June found that about 66 percent of the more than 700 managers surveyed by World at Work offered signing bonuses as a single payment.

2. Give the right incentive.

Not sure how much to offer? Consider the level of talent and skills needed for a specific position. Generally, senior-level employees receive higher signing bonuses than entry-level employees or midlevel managers.

More than 40 percent of the respondents said they paid over $50,000 in signing bonuses for senior-level positions, according to the World at Work survey. Employers might pay $5,000 to $9,999 for bonuses to other employees.

3. Use signing bonuses to build trust.

Signing bonuses create the foundation for a positive relationship between an employer and a new hire. The December study "Can a Signing Bonus Motivate Effort?" of some 200 undergraduate business students indicated that when employers offer signing bonuses, this can build the trust of new hires and provide an incentive for them to work harder.

4. Improve talent recruitment.

In a study last year by Aerotek and the Human Capital Institute, 46 percent of about 570 professionals at companies (mostly in the United States) said bonuses are the best way to attract senior-level employees.

Employers can offer a one-time signing bonus in place of promising future bonuses or a specific timeline for raises to salaries.

Related: Reality Check: Not Everyone Deserves a Bonus

Does your organization offer signing bonuses? Why?
Heather R. Huhman

Career and Workplace Expert; Founder and President, Come Recommended

Waldorf, Md.-based Heather R. Huhman is a career expert, experienced hiring manager and president of Come Recommended, the PR solution for job search and HR tech companies. She writes about issues impacting the modern workplace.

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