There
are pros and cons to "signing bonuses" when your company is trying
to lure top applicants, but they can work in your favor if you use
them effectively. For example, giving a hot prospect
an "exploding offer."
It works like
this: Suppose you find
the right candidate for a critical position and offer him the job.
He wavers because he's being courted by other companies.
You can offer the candidate a tidy financial
incentive to accept your offer quickly - say, within a
week. The longer he takes to make up his mind, the less of a signing
bonus he'll receive. For instance, you might offer a bonus of
$2,500, which drops by $500 a day. So if you extend a job offer on
Monday and the candidate doesn't accept until Thursday, the bonus
drops to $1,000.
True, the candidate can always choose to sign with another
company offering a better bonus. However, conventional signing
bonuses are generally made in payments spread out over time.
By comparison, "exploding offers" usually entail cash upfront in
a lump sum. This gives your company an advantage. The recruit can
sign with one of your competitors for, say, a $5,000 bonus spread
over a year's time, or join your company and put $2,500 in his
pocket right away. You can underbid your competitors and still come
out ahead.
Exploding offers don't work with all candidates. Some candidates
feel too pressured so you might want to reserve the approach for
people who feel comfortable making important decisions quickly. In
those cases, it can help you land the right candidate at the
right time. |
