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There was a time when receiving a sign-on bonus was far from the norm. It was predominantly offered as extra enticement to corporate bigwigs being head-hunted by company competitors. Nowadays, due to what Seek has termed the ‘great jobs boom’, sign-on bonuses are becoming far more commonplace.

The AFR recently reported on the extra inducements employers are being driven to offer employees. For instance, more than twelve new staff at McDonald’s Chatswood recently scored a $1,000 sign-on bonus. Meanwhile burger chain Grill’d in Melbourne has advertised an impressive $10,000 sign on bonus for an Assistant Restaurant Manager position. 

Hospitality isn’t the only industry seeing an increase in employees being offered a sign-on bonuses. Anyone from plumbers to truck drivers may be offered a sign-on bonus in this climate. Healthcare is another sector which has been utilising sign-on bonuses to try and fill jobs. Take for instance an advertised $20,000 sign-on bonus for a Lithgow general practitioner and also $15,000 sign-on bonuses for nurses to work in correctional facilities in Sydney and Melbourne.

With the current skills shortage, it’s no wonder sign-on bonuses are now regularly offered by employers. The “great jobs boom” has seen Seek reporting 59 per cent more ads on its platform than the pre-pandemic average in 2019. The ABC reported here that there is now “one unemployed person per vacant job… Australia’s unemployment rate is 3.5 per cent, and it hasn’t been this low since August 1974.”

So, what’s the deal with sign-on bonuses?

Employers have a much greater likelihood of being offered (or negotiating) a sign-on bonus in this job market than ever before. There are three main reasons employers offer them:

1. To beat the competition. For obvious reasons, in a highly competitive job market employers are looking for ways to edge out the competition. This is the main reason we’ve seen an increase in sign-on bonuses right now.

2. To maintain company salary equity. This is more likely to occur at large firms and organisations that want to secure you but can’t pay you outside of the company’s salary range for your level.

3. To make up the difference for benefits left behind. If an employee will be forgoing a bonus to sign on to a new role, companies will sometimes offer the new employee a signing bonus to make up the difference.

Always read the fine print!

Sign-on bonuses are appealing for obvious reasons. However, if you’re offered a sign-on bonus, it’s important to understand the terms. Some companies will require that you pay back the money if you leave before a certain date which may be as long as a year away! Others won’t actually pay you the sign-on bonus until you’ve worked there for at six months or more. As attractive as a sign-on bonus is, make sure the job is truly a good fit for you. You wouldn’t want to feel stuck in a job you’re unhappy with because you’re hoping to hang on until your sign-on bonus has been paid or until you don’t have to pay it back!