The Sign-On Bonus is dead…for now
We all understand what a “sellers market” means in real estate as we saw the bonanza during the Covid era: the power dynamic shifted to sellers who can leverage that power to demand a higher selling price to their home. We also can see how quickly the power dynamic can shift due to economic conditions, and we know that the flip to a buyers market is temporary until the power struggle balances out. The same principles can be applied to the job market where the conditions can be in favor of companies or candidates. I’m here to tell you that right now, as of Q4 2023, we are still in an employer market and the sign-on bonus is dead….for now.
Recently, I had two candidates lose job opportunities by performing similar actions: upon receiving an offer letter from a company, they responded with a list of demands. Demands for a cell-phone stipend, unlimited sick days, an internet stipend, $1200 for a home-office set-up, and yes, a sign-on bonus. These candidates were under the impression that their skills merited an additional list of demands to be made at the 11th hour, and this opinion was met with a rescinded offer from the employer. The current job climate is not in favor of candidates, and yet candidate actions are not reflecting this. As of August 2023, 6.4 million people in the United States were unemployed, a slight rise from July 2023. Quit rates are declining. The remainder of 2023 is predicted to have more job losses. Inflation is causing benefit costs to rise and the cost of keeping an employee even higher. In sum; it’s looking bleak for candidates.
Fear not, despite a bleak outlook there is hope! Candidates need to understand where they stand in this job market, and where their power is. Receiving a job offer in this current climate should feel like a gift, and should be received with thanks instead of a list of demands. I’m not saying that candidates should accept any job offer and I advocate for candidates asking for their worth, but there are better tactics to achieving this than a written list of demands to be met within 48 hours.
First, know that salaries are slow to catch up with inflation. If you’re a candidate working with a recruiter, be honest in letting them know the salary you are looking for, and what your floor is. Not only does this benefit you by addressing the compensation upfront, but also allows the recruiter to educate the company about current market rates. A recruiter is a trusted advisor to a company and can set expectations for a higher salary on behalf of the candidate - without the candidate needing to engage in a tense conversation.
Next, if a candidate is interviewing for a full-time non-exempt position, benefits should absolutely be part of the package. Due to economic conditions, any benefits beyond the basics of health/dental/vision insurance, disability benefits, and 11 days of PTO is a bonus, and should not be viewed as a given. If you’re a senior candidate, higher expectations for PTO is reasonable, as well as a request for retirement savings and equity, if applicable. In current market conditions, expectations for cell phone stipend, internet stipend, work from home setup, unlimited sick days, sign-on bonus, 401k match, maternity/paternity leave, a wellness stipend, education assistance, free lunches, professional development budget and other benefits is outdated and may lead to the loss of a job offer. To put it bluntly, there is too much supply (candidates) and not enough demand (jobs) for candidates to be making demands that were better suited for market conditions in 2017.
As a candidate, keep timing on your side. If you’re wanting to negotiate, pepper this throughout the interview process and keep the questions light and conversational. Request a call with HR before the written offer to understand the full benefits package and to ask questions about the health insurance plan. Ask what changes in benefits HR is looking to make for the future - perhaps your required benefit is just one quarter away from implementation! You should have a solid understanding of what the offer is before a letter is delivered to you and confidence in what you are willing to walk away from.
After receiving the offer letter, if the benefits still are not what you as a candidate desire, work with their recruiter to ask what might be possible from the company. The recruiter may know of previous requests that were not met, of budget constraints, or of additional benefits (perhaps an internet stipend can’t be met for remote employees, but a monthly cell phone stipend, can). This again saves you as a candidate from making a list of demands that cannot be met and allows you to save face! Consider how your requests will be perceived with a list of demands rather than a light conversation: are you someone easy to work with? Will you seek understanding before advising, or are you prone to draw a hard line in the sand? Work with a recruiter to evaluate the situation and not tarnish your personal brand before even starting your employment.
Best of luck, out there. It’s been a tough year, but remain adaptable and utilize your resources, tools, and messaging to your advantage. And remember that everything is temporary, and the singing bonus might just make a reappearance in 2024.