Sign-On Bonus or Relocation Assistance

Posted on May 3, 2007
Filed Under Online Recruiting, Advertising Mistakes, Out of Market Recruiting, Socially Responsible Recruiting, Best Practices, Retention |

Many employers struggle over the decision of whether to offer a sign-on bonus or relocation assistance to the relocating professional.

Our position is that sign-on bonuses are a band-aid solution. Many times they cause additional turn-over within the industry, increase overall cost-of-labor and lower continuity of care or service being delivered. This is because a sign-on bonus will attract local level candidates as well as relocating professionals. Although you may not advertise the bonus locally, word will get out on the street and local candidates will apply and ask for the sign-on bonus.

When employers from the same industry in the same market pull out the ’sign-on bonus’ play, trouble usually follows. Other employers in that industry will have to follow suit to stay competitive. A battle for who offers the higher sign-on bonus arises. And then wage wars follow in addition to the sign-on bonus. The entire ‘cost of labor’ increases incrementally while retention levels diminish. As turn-over increases, the quality of service decreases and the entire industry is affected.

When trying to attract professionals from other markets, many times it is better to offer relocation assistance or even turn your sign-on bonus into a retention bonus offering it over the course of 2 years. Our experience has been that many professionals are already planning on relocating to Las Vegas - so a sign-on bonus or relocation assistance are not needed.

Instead - invest that money in retention. It is a much better investment.