- Employers are increasingly offering signing bonuses, according to ZipRecruiter data.
- The bonuses are meant to lure workers to positions in the midst of labor shortages.
- But one-time bonuses are a popular strategy because they’re temporary.
- See more stories on Insider’s business page.
Businesses need workers, and some firms are shelling out some extra cash to make that happen. That means that job seekers could get at least an extra $500 just for accepting a position.
Julia Pollak, a labor economist at job search site ZipRecruiter, found that the number of positions offering signing bonuses has skyrocketed in recent months. According to a chart she shared on Twitter, about 20% of positions in May offered a signing bonus, and just below 20% posted in June also came with extra cash. That compares to March, when just 2% of positions offered signing bonuses, Pollak told The Wall Street Journal.
According to the Journal, Missouri, Arkansas, Wyoming, Vermont, and Iowa had the most postings offering signing bonuses. Those are all states that are hovering slightly below — or just above — economic conditions prior to the pandemic.
In Georgia, a forklift-operator position at Kubota Manufacturing of America comes with a $2,000 signing bonus. The Journal spoke to Phil Sutton, a vice president at the company, about that extra cash. He told the Journal that the bonus is paid out in increments — with 25% given out 30 days into work, the next 25% at 60 days, and the rest when the worker hits 90 days — and that’s it’s “been a great success in terms of recruiting.”
The decision to offer a signing bonus, rather than just simply upping wages, may be a reaction to how transitory labor shortages are.
Pollak told Insider on Tuesday that employers don’t know if labor shortages will be a long-term issue, or whether they will recede when short-term factors like enhanced unemployment benefits and school closures come to an end. Currently, 26 states have opted to cut off federal benefits early, and all enhanced benefits are set to end in September.
That’s why opting for signing bonuses is a popular strategy to lure in workers — for now.
“It’s something that they can reverse later if there is really a wave of job seekers into the labor market in September, October,” Pollak told Insider. “But it’s also very attractive, especially to young people to get a nice chunk of change and a little bit of extra cash, especially when people have become sort of accustomed to getting these checks and these little windfalls.”
While one-time bonuses might be one way to temporarily address the problem, Heidi Shierholz, the director of policy at the left-leaning Economic Policy Institute, previously told Insider there could be a more simple, compensation-based solution: Raising wages altogether.