How Much Is the Average Signing Bonus?

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Signing bonuses are usually lump sums of money offered to potential hires to entice them to join a company. The average value of the signing bonus will depend on the industry, but it can range anywhere from a few hundred or thousand dollars to upwards of $50,000.

There may also be other signing bonuses offered after someone starts working at the company, such as when a certain performance target is met or a long-term incentive bonus that may sway an employee to stay at the organization for a certain number of years.

Signing bonuses are most frequently utilized by financial services firms to lure experienced professionals from competitors. Signing bonuses also are often employed to recruit top investment bankers. Here's what to know about signing bonuses.

Key Takeaways

  • The value of a signing bonus depends on the industry and the candidate.
  • On average, it's usually in the thousands of dollars, such as $10,000 or even upwards of $50,000.
  • If you're interested in a signing bonus, you may be able to negotiate for one before accepting a compensation package from a new company.

Average Size of Signing Bonuses

The size of a signing bonus, when offered, can vary greatly depending on the firm making the offer, the perceived value of the employee, and the current competitive climate, especially what other firms are offering to lure similar talent.

For seasoned financial advisors who are recruited via signing bonuses, it is not unusual for the amount to be around 100% of their prior year's total compensation. In 2021, Investment News reported that LPL Financial offered a signing bonus of up to 150% of the advisor's prior-year total revenue.

For other industries, signing bonuses could be as little as $500 to as large as $25,000 or $50,000, depending on the candidate, years of experience, and role in the organization. For example. in 2020, some physicians earned signing bonuses of $10,000, and others earned up to $75,000, according to an analysis by Becker's Hospital Review.

How Signing Bonuses Work

A firm offering a signing bonus must guard itself against the possibility that the new employee will leave soon after starting to accept another offer elsewhere, and/or that the employee will fail to perform up to expectations.

To protect against these risks, recipients of large signing bonuses often must sign legal documents acknowledging that the amount is repayable if certain conditions have not been met, such as remaining with the firm for a specified number of years and/or meeting certain performance goals over that time period.

As performance goals are met, or as years of employment pass, the terms of the agreement usually specify that the firm will forgive a portion of the signing bonus, giving the employee the legal right to keep that sum, which then becomes taxable income to that person.

Signing Bonus Trends

The pandemic that began in 2020 had a big impact on the labor market. Many companies were short staffed for years, and an uptick in signing bonuses was seen as just one result. In July 2022, 5.2% of job listings on Indeed.com advertised a signing bonus, according to an analysis by the job search website itself. That was three times the number seen in July 2019.

In April 2022, Walgreens made headlines when it started offering $75,000 signing bonuses to pharmacists. The store chain was already operating at reduced pharmacy hours across the country, and the signing bonus was used to entice workers to apply.

Hartford, Connecticut schools also offered signing bonuses of up to $5,000 in 2022, due to being short-staffed. Stanly County Schools in North Carolina also offered signing bonuses of up to $10,000.

Signing bonuses are just one way for companies, organizations, and schools in a variety of sectors to entice workers to apply. It's unknown though if it's a proven strategy that is around to stay for the long-term.

Frequently Asked Questions (FAQs)

What is a signing bonus?

A signing bonus is a monetary incentive that employers use to recruit and hire workers. They're often paid in a lump sum with stipulations around the timing of the payout.

How do you ask for a signing bonus?

If you're applying for jobs and are interested in a signing bonus, ask about it during your first conversation around compensation with the talent recruiter or hiring manager. If it's not offered, ask if it is something that could be considered as part of the compensation package. You may also be able to negotiate for one after the job offer is extended to you.

Updated by Hilarey Gould

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