Skip to main content
  • Foundation
  • Executive network
  • CEO Circle
  • Enterprise Solutions
  • Linkage Logo
  • Store
  • Sign In
  • Account
    • My Account
    • Logout
    • Global
    • India
    • MENA
SHRM
About
Book a Speaker
Join Today
Renew
Rejoin Now
Renew
  • Membership
  • Certification
    Certification

    Smiling asian student studying in library with laptop books doing online research for coursework, making notes for essay homework assignment, online education e-learning concept
    Get Certified!

    Be recognized as an HR leader with your SHRM-CP or SHRM-SCP credential.

    • How to Get Certified

      Demonstrate your ability to apply HR principles to real-life situations. No other HR certification compares.

      • How to Get Certified
      • Eligibility Criteria
      • Exam Details and Fees
      • SHRM-CP
      • SHRM-SCP
      • Which Certification is Best for Me
      • Certification FAQs
    • Prepare for the Exam

      Give yourself the best chance to pass your SHRM certification exam.

      • Exam Preparation
      • SHRM BASK
      • SHRM Learning System
      • Instructor-Led Learning
      • Self-Study
      • Study Aids & Add-ons
    • Recertification

      Recertify your SHRM Credentials before your end date!

      • Specialty Credentials
      • Qualifications
  • Topics & Tools
    Topics & Tools

    Stay up to date with workplace news and leverage our vast library of resources to streamline day-to-day HR tasks.

    The white house in washington, dc.
    Executive Order Impact Zone

    Do not abandon, but evaluate and evolve. It is about legal, equal opportunity for all.

    • News & Trends

      Follow breaking news and emerging workplace trends.

      Legal & Compliance

      Stay informed on workplace legal updates and their impacts.

      From the Workplace

      Explore diverse perspectives from your peers on today's workplaces.

      Flagships

      Get curated collections of podcasts, videos, articles, and more produced by SHRM.

    • HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • Workplace Technology
      • Workplace Violence Prevention
      SEE ALL
      SHRM Research
    • Tools & Samples

      Access member resources and tools to streamline HR tasks.

      • Forms & Checklists
      • How-To Guides
      • Interactive Tools
      • Job Descriptions
      • Policies
      • Toolkits
      SEE ALL
      Ask an Advisor
  • Events & Education
    Events & Education

    SHRM25 in San Diego, June 29 - July 2, 2025
    Join us for SHRM25 in San Diego

    Register for the World’s Largest HR Conference being held on June 29 - July 2, 2025

    • Events
      • SHRM25
      • The AI+HI Project 2025
      • INCLUSION 2025
      • Talent 2026
      • Linkage Institute 2025
      SEE ALL
      Webinars
    • Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

      Specialty Credentials

      Demonstrate targeted competence and enhance credibility among peers and employers.

      Qualifications

      Gain a deeper understanding and develop critical skills.

    • Team Training & Development

      Customized training programs unique to your organization’s needs.

  • Business Solutions
  • Advocacy
    Advocacy

    Make your voice heard on public policy issues impacting the workplace.

    Advocacy
    SHRM's President & CEO testifies to Congress on "The State of American Education"
    • Policy Areas
      • Workforce Development
      • Workplace Inclusion
      • Workplace Flexibility & Leave
      • Workplace Governance
      • Workplace Health Care
      • Workplace Immigration
      State Affairs

      SHRM advances policy solutions in state legislatures nationwide.

      Global Policy

      SHRM is the go-to for global HR leaders and businesses on workplace matters.

    • Advocacy Team (A-Team)

      SHRM’s A-Team is a key member benefit, giving you the tools, insights, and opportunities to shape workplace policy and drive real impact.

      Take Action

      Urge lawmakers to support policies that create lasting, positive change.

      Advocacy & Legislative Resources

      Access SHRM’s curated policy materials and content.

    • SHRM-Led Coalitions
      • Generation Cares
      • The Section 127 Coalition
      • Learn More & Partner with SHRM Government Affairs
  • Community
    Community

    Woman raising hand in group
    Find a SHRM Chapter

    Easily find a local professional or student chapter in your area.

    • Chapters

      Find local connections from over 607 chapters and state councils and create your personalized HR network.

      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      SHRM Northern California

      Join SHRM members in the greater San Francisco Bay area for local events and networking.

    • Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      • Membership Advisory Council
      • Regional Councils
    • Volunteers

      Learn about volunteer opportunities with SHRM.

      • Volunteer Leader Resource Center
Close
  • Membership
  • Certification
    back
    Certification
    Smiling asian student studying in library with laptop books doing online research for coursework, making notes for essay homework assignment, online education e-learning concept
    Get Certified!

    Be recognized as an HR leader with your SHRM-CP or SHRM-SCP credential.

    • How to Get Certified

      Demonstrate your ability to apply HR principles to real-life situations. No other HR certification compares.

      • How to Get Certified
      • Eligibility Criteria
      • Exam Details and Fees
      • SHRM-CP
      • SHRM-SCP
      • Which Certification is Best for Me
      • Certification FAQs
    • Prepare for the Exam

      Give yourself the best chance to pass your SHRM certification exam.

      • Exam Preparation
      • SHRM BASK
      • SHRM Learning System
      • Instructor-Led Learning
      • Self-Study
      • Study Aids & Add-ons
    • Recertification

      Recertify your SHRM Credentials before your end date!

      • Specialty Credentials
      • Qualifications
  • Topics & Tools
    back
    Topics & Tools

    Stay up to date with workplace news and leverage our vast library of resources to streamline day-to-day HR tasks.

    The white house in washington, dc.
    Executive Order Impact Zone

    Do not abandon, but evaluate and evolve. It is about legal, equal opportunity for all.

    • News & Trends

      Follow breaking news and emerging workplace trends.

      Legal & Compliance

      Stay informed on workplace legal updates and their impacts.

      From the Workplace

      Explore diverse perspectives from your peers on today's workplaces.

      Flagships

      Get curated collections of podcasts, videos, articles, and more produced by SHRM.

    • HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • Workplace Technology
      • Workplace Violence Prevention
      SEE ALL
      SHRM Research
    • Tools & Samples

      Access member resources and tools to streamline HR tasks.

      • Forms & Checklists
      • How-To Guides
      • Interactive Tools
      • Job Descriptions
      • Policies
      • Toolkits
      SEE ALL
      Ask an Advisor
  • Events & Education
    back
    Events & Education
    SHRM25 in San Diego, June 29 - July 2, 2025
    Join us for SHRM25 in San Diego

    Register for the World’s Largest HR Conference being held on June 29 - July 2, 2025

    • Events
      • SHRM25
      • The AI+HI Project 2025
      • INCLUSION 2025
      • Talent 2026
      • Linkage Institute 2025
      SEE ALL
      Webinars
    • Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

      Specialty Credentials

      Demonstrate targeted competence and enhance credibility among peers and employers.

      Qualifications

      Gain a deeper understanding and develop critical skills.

    • Team Training & Development

      Customized training programs unique to your organization’s needs.

  • Business Solutions
  • Advocacy
    back
    Advocacy

    Make your voice heard on public policy issues impacting the workplace.

    Advocacy
    SHRM's President & CEO testifies to Congress on "The State of American Education"
    • Policy Areas
      • Workforce Development
      • Workplace Inclusion
      • Workplace Flexibility & Leave
      • Workplace Governance
      • Workplace Health Care
      • Workplace Immigration
      State Affairs

      SHRM advances policy solutions in state legislatures nationwide.

      Global Policy

      SHRM is the go-to for global HR leaders and businesses on workplace matters.

    • Advocacy Team (A-Team)

      SHRM’s A-Team is a key member benefit, giving you the tools, insights, and opportunities to shape workplace policy and drive real impact.

      Take Action

      Urge lawmakers to support policies that create lasting, positive change.

      Advocacy & Legislative Resources

      Access SHRM’s curated policy materials and content.

    • SHRM-Led Coalitions
      • Generation Cares
      • The Section 127 Coalition
      • Learn More & Partner with SHRM Government Affairs
  • Community
    back
    Community
    Woman raising hand in group
    Find a SHRM Chapter

    Easily find a local professional or student chapter in your area.

    • Chapters

      Find local connections from over 607 chapters and state councils and create your personalized HR network.

      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      SHRM Northern California

      Join SHRM members in the greater San Francisco Bay area for local events and networking.

    • Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      • Membership Advisory Council
      • Regional Councils
    • Volunteers

      Learn about volunteer opportunities with SHRM.

      • Volunteer Leader Resource Center
Join Today
Renew
Rejoin Now
Renew
  • Store
    • Global
    • India
    • MENA
  • About
  • Book a Speaker
  • Foundation
  • Executive network
  • CEO Circle
  • Enterprise Solutions
  • Linkage Logo
SHRM
Sign In
  • Account
    • My Account
    • Logout
Close

  1. Topics & Tools
  2. Workplace News & Trends
  3. HR Magazine
  4. Are Sign-on Bonuses an Effective Recruiting Tool?
Share
  • Linked In
  • Facebook
  • Twitter
  • Email

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus convallis sem tellus, vitae egestas felis vestibule ut.


Error message details.

Copy button
Reuse Permissions

Request permission to republish or redistribute SHRM content and materials.


Learn More
Feature

Are Sign-on Bonuses an Effective Recruiting Tool?

Two experts debate the issue.

August 29, 2022 | Chelsea Stearns, SHRM-CP, and Lindsey Garito, SHRM-SCP

 yes
Sign-on bonuses show candidates you value them.

Chelsea Stearns


Companies across the country are competing ferociously for the same talent as they try to survive the Great Resignation. In June 2022, job openings were at 10.7 million, while the number of people voluntarily leaving their jobs was 4.2 million, according to the U.S. Bureau of Labor Statistics.

Employees know they can easily find another job because there are many available. So what can you do to attract and retain talent?

It’s time to get creative and consider sign-on bonuses.

A 2022 survey by Salary.com found that only one-third of responding companies said they are utilizing sign-on bonuses, so those that choose to offer them stand out to applicants. A sign-on bonus demonstrates to the candidate that you value them and are willing to compete if that is what it takes for them to join your team. Sign-on bonuses can help make up for an inability to match a job candidate’s salary expectation or to pay relocation expenses. 

Rather than offering a higher salary that the organization will be expected to support during the entire lifespan of the employee’s tenure, you are offering a one-off payment. This enables the employer to provide more-substantial salary increases over time and to encourage the employee to continue achieving. By offering sign-on bonuses rather than higher base salaries, employers hopefully won’t have to worry about reducing compensation budgets when the market cools down.

Many HR professionals wonder why they can’t attract the right candidates. It’s probably because those candidates aren’t looking for new jobs. Only about 10 percent of job seekers are actively and urgently looking for new employment opportunities, according to a 2021 survey of 5,000 U.S. workers by Indeed. A sign-on bonus can be used to pique the interest of more-passive candidates by providing an incentive and proving that the grass can, in fact, be greener on the other side. Not only do passive candidates typically have stable employment histories, but they probably aren’t interviewing with many other companies, which gives you a leg up on the competition.

After the perfect candidate accepts your offer and begins work, you cross your fingers, hoping they will stay with the company for an extended period. Sign-on bonuses can help you to relax and entice them to stay. When these bonuses are given out in increments, employees are motivated to remain at the company at least until they have received the full amount. 

Earlier this year in Chicago, for example, United Airlines was offering a $10,000 sign-on bonus to part-time baggage handlers. This sign-on bonus is paid in monthly installments and requires employees to stay with the company for at least one year; otherwise, they must pay back the funds. 

Often, if the sign-on bonus is significant, it can be paid out over a two-year period. The sign-on bonus can also be contingent upon the employee achieving specific goals or staying with the company for a certain period. If these goals are not met or if the employee leaves the company prematurely, these payments can be clawed back. Of course, all of these terms need to be put in writing and agreed to by the new hire and the company. 

Although sign-on bonuses are not the “magic pill” we are seeking to cure the Great Resignation, they are necessary to compete during these unprecedented times. 

Chelsea Stearns, SHRM-CP, is associate director of employee experience at QinetiQ in Lorton, Va., and an adjunct ­faculty member at Georgetown University in Washington, D.C.


no

The effectiveness of a sign-on bonus is short-lived.

Lindsey Garito


Sign-on bonuses are typically used as a tool to attract and hire new external talent. They’re commonly utilized in a competitive talent market, such as the one we are facing today, in which job candidates are receiving multiple offers and being more selective about where they choose to work.

These bonuses also may be utilized when a top candidate is looking for higher compensation than the organization is willing to pay and the employer wants to offer an initial incentive to help offset the difference. A sign-on bonus can be a quick fix to secure talent and make a hire that would otherwise be difficult to land.

However, the effectiveness of the sign-on bonus can be short-lived. Candidates might decide to accept a job offer for the wrong reasons if they’re focusing exclusively on monetary factors. In cases when the sign-on bonus is used to mitigate the company’s inability to meet the candidate’s desired salary, the individual might remain unhappy with their base compensation and leave to accept a more competitive offer. 

The most effective hires will be those who accept a job offer because they value the professional opportunity, see a path for growth, have a sense of purpose, will be doing meaningful work, and feel a connection to a strong manager and team. A sign-on bonus won’t be able to retain employees if these elements aren’t part of the employees’ experience. Instead, they will likely leave soon after receiving the sign-on bonus.

Why is this important when trying to hire? Throughout the Great Resignation, we have seen that compensation is not the driving factor for attracting or retaining talent. The focus has shifted to flexibility, engagement, respect and meaningful work. Gallup’s recent State of the Global Workplace report highlights how low engagement leads to higher turnover. In addition, a recent McKinsey & Co. survey found that 40 percent of employees are somewhat likely to leave their jobs within three to six months. This means it is imperative for organizations to ensure they aren’t focusing so much on hiring that they forget about their existing employees.

A strategic total rewards program is critical for continued organizational growth and success. Investing in ongoing compensation and benefits programs is more beneficial than providing a one-time sign-on bonus. The focus should be on building meaningful and more-robust opportunities to offer compensation incentives that create greater impact for current and new employees alike. 

So how can we effectively recruit new talent while engaging and rewarding our current employees? A more effective recruiting tool would be to turn a sign-on bonus into a dual incentive bonus that links existing employees with referrals and the hiring of new employees. Under this approach, instead of providing incentives just for new hires, bonuses are paid to both the new employees and the current employees who referred them. 

Typically, companies use one or the other—a sign-on bonus or a referral bonus. Great people know great people, so an incentive that rewards both the new hire and the existing employee who made the referral will be even more successful. 

Existing employees can be valuable ambassadors and help serve as an important recruiting base for top qualified professionals. 

Employees can earn extra compensation incentives by referring great talent from their personal networks to help fill current job openings and staffing needs for the organization—a win-win.    

Lindsey Garito, SHRM-SCP, is director of human capital management and total rewards at Summit Health in Rye Brook, N.Y.

Bonuses and Incentives
Compensation
Talent Acquisition

Artificial Intelligence in the Workplace

​An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.



Related Content

Kelly Dobbs Bunting speaks onstage at SHRM24
(opens in a new tab)
News
Why AI+HI Is Essential to Compliance

HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.

(opens in a new tab)
News
A 4-Day Workweek? AI-Fueled Efficiencies Could Make It Happen

The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.

(opens in a new tab)
News
How One Company Uses Digital Tools to Boost Employee Well-Being

Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.

HR Daily Newsletter

Stay up to date with the latest HR news, trends, and expert advice each business day.

Success title

Success caption

Manage Subscriptions
  • About SHRM
  • Careers at SHRM
  • Press Room
  • Contact SHRM
  • Book a SHRM Executive Speaker
  • Advertise with Us
  • Partner with Us
  • Copyright & Permissions
  • Post a Job
  • Find an HR Job
Follow Us
  • LinkedIn
  • Facebook
  • Twitter
  • Instagram
  • YouTube
  • SHRM Newsletters
  • Ask An Advisor

© 2025 SHRM. All Rights Reserved

SHRM provides content as a service to its readers and members. It does not offer legal advice, and cannot guarantee the accuracy or suitability of its content for a particular purpose. Disclaimer


  1. Privacy Policy

  2. Terms of Use

  3. Accessibility

Join SHRM for Exclusive Access to Member Content

SHRM Members enjoy unlimited access to articles and exclusive member resources.

Already a member?
Free Article
Limit Reached

Get unlimited access to articles and member-exclusive resources.

You've reached the limit of 1 free article this month. Join to access unlimited articles and member-only resources.

Already a member?
Free Article
Exclusive Executive-Level Content

This content is for the SHRM Executive Network and Executive Content Subscription members only.

You've reached the limit of 1 free article this month. Join the Executive Network and enjoy unlimited content.

Already a member?
Free Article
Exclusive Executive-Level Content

This content is for the SHRM Executive Network and Executive Content Subscription members only.

You've reached the limit of 1 free article this month. Join and enjoy unlimited access to SHRM Executive Network Content.

Already a member?
Unlock Your Career with SHRM Membership

Please enjoy this free resource! Join SHRM for unlimited access to exclusive articles and tools.

Already a member?

Your membership is almost expired! Renew today for unlimited access to member content.

Renew now

Your membership has expired. Renew today for unlimited access to member content.

Renew Now

Your Executive Network membership is nearing its expiration. Renew now to maintain access.

Renew Now

Your membership has expired. Renew your Executive Network benefits today.

Renew Now