Recruiting is rarely easy. Finding the right person for the job has always had its challenges. When you finally land the (near) perfect hire, it can often feel like you struck gold because the road to get there was so hard. Those challenges have never been more prevalent than during the pandemic.
It's no secret that the current employment environment is a game-changer. With recruitment, applicants have the advantage. To accept job offers, applicants are asking for higher pay, better benefits, better hours, and more, and employers have to decide what they’re willing to concede at a time when quality workers seem so scarce.
Before an employer can even make a job offer, they must jump through a myriad of hoops—the first being attracting applicants. Employers must set themselves apart to encourage applicants to apply. Today, employers are taking approaches to recruiting they never would have considered before. Case in point: signing bonuses. And the question is, should you consider this approach?
According to an article on NPR called “A $500 sign-on bonus to deliver pizzas? Here’s what to know about hiring incentives,” on the jobs site Indeed.com, postings advertising some kind of hiring incentive have more than doubled since last July …searches for terms such as “hiring bonus” have also doubled, indicating job seekers are intrigued.
From a job seeker’s standpoint, there are no disadvantages to signing bonuses. No one is going to turn down extra pay.
From an employer’s perspective, the results are mixed. Whether signing bonuses work is very much industry and position dependent; it’s going to work for some, but not all situations.
How do signing bonuses work?
Signing bonuses are financial incentives to accept a position with a practice. They’re separate from an individual’s regular salary, benefits, or other bonus opportunities. They can be:
- A single payment
- Multiple payments over a period of time (used to compel longevity)
- Stock options
A signing bonus can range from 5% to 25% of a typical year’s pay, depending on the type of job and the industry.
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Points to keep in mind
If you’re going to offer a signing bonus, here are a few things to consider:
- The agreement to provide the bonus, and any conditions thereof, should be documented in writing at the time the offer is accepted. This should include details such as how much and at what intervals it will be given. For example, total bonus is $1,000. On first paycheck, $500 will be provided. After employment of three months, the remaining $500 will be provided.
- A failure to pay the bonus can result in a breach of contract claim, so you will need to be very clear on the conditions for earning and paying it. If the condition is solely about longevity, then it must be paid even if, for example, their performance is lacking, and/or you’re unhappy with them overall.
- Once paid out, you should consider a signing bonus unrecoverable. While it might be possible to require someone to repay the money if they quit, that’s fraught with problems. In many states, it is not legal to deduct the bonus from their check. Even if it is, it may not be legal to deduct all of it. If some or all of it can’t be deducted, you’ll be relying on the (former) employee to pay you back, which is unlikely. While you could pursue the matter in small claims court, that’s a hassle and not likely worth it.
- If your practice is large enough to offer opportunities for current employees to apply for jobs internally, consider a signing bonus for them, as well. This will help ensure that current employees feel valued and appreciated and serve to boost morale.
The good news is that you can try this and see if it works. You can also cancel at any time, so it’s not a long-term commitment. The bad news is that it’s not likely a miracle cure for the recruiting dilemma we find ourselves in—it’s just one of the tools in our recruiting arsenal. These days, it doesn’t hurt to try new approaches, set yourself apart, and get ahead of what your dental practice competitors are doing. You never know—it just might work.
Editor's note: This article appeared in the May 2022 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.