A signing bonus is a financial incentive many companies offer to encourage executives to work for them and is particularly common in the corporate world. In fact, 88 percent of companies surveyed offer signing bonuses, according to a study by World at Work, a global non-profit organization for HR management professionals and business leaders.
Signing bonuses can be an appealing aspect of new job offers and can range up to more than $50,000, relevant to the industry and the position. Companies utilize signing bonuses to make the job offer more attractive and compensate executives for changing jobs or denying active offers from other employers. As with any contract, there are pros and cons of signing bonuses.
Pros:
- Offsets hardship expenses in between jobs.
- It can be invested to grow over time.
- Can be leveraged if more than one company offers you a job.
- Compensates you if the salary is less than the desired salary or does not provide good benefits.
Cons:
- Bonus is compensation due to a lower salary.
- Taxed as supplemental income.
- Conditional clauses affecting access to the funds.
- Required repayment if you leave the job during a specified time.
How Do I Negotiate a Signing Bonus?
Once you receive an official job offer with the proposed salary and benefits, you can gauge your opportunity for a signing bonus or negotiate a better one if a bonus is offered. Here are steps to take to prepare for contract negotiations:
- Research the market: Research the company’s benefits and compensation packages, as well as industry-standard signing ranges for your role, business sector, and location, to prepare a realistic offer and to negotiate.
- Prepare your case: Justify your signing bonus request before negotiating by demonstrating your value. Use specific examples and evidence to present a strong case highlighting your skills, professional achievements, and contributions you will bring to the company, as well as your commitment and enthusiasm for joining the company.
- Be flexible: Signing bonuses are unique to the individual, and you need to be creative and flexible during negotiations and adapt your strategy to the position and employer. Depending on the employer, you may have more or less leverage, objections, or constraints. Understanding these elements before negotiations allows you to adjust your strategy, research alternatives, and find mutually beneficial solutions.
- Communicate professionally: How you communicate during negotiations can decide whether you will succeed. Be respectful, confident, and assertive in communicating your values and expectations, and open to the employer’s perspective and concerns.
- Request it in writing: A signing bonus should be included in your contract, with all the agreed-upon details and conditions. If the employer does not offer a contract, request one. Having a written contract provides some recourse if the employer violates the terms and provides a reference on what is expected of you.
Upfront signing bonus amounts vary. Before agreeing to and signing a bonus contract, read the terms and conditions thoroughly to understand how your career and overall compensation will be impacted. It is also wise to consult a knowledgeable and experienced executive contract lawyer who can review the contract and identify potential problems.
Philadelphia Executive Contract Lawyers at The Gold Law Firm P.C. Help Clients Prepare and Negotiate Signing Bonuses
If you are considering a job offer and want a signing bonus, our Philadelphia executive contract lawyers at The Gold Law Firm P.C. can help. Call 215-569-1999 or contact us online to schedule a free consultation. Located in Philadelphia and Pennsauken, New Jersey, we serve clients in South Jersey and Southeastern Pennsylvania, including Wilkes-Barre, Scranton, Northeast Philadelphia, Bucks County, Chester County, Delaware County, Lehigh County, Montgomery County, and Cherry Hill.
