Retention bonuses often referred to as retention pay or a stay bonus, have historically been offered at larger companies and corporations to ensure an employee will stay with the company through a large project or a transition or merger. This is not always been the case in more recent years. These retention practices in all sizes of businesses and for a variety of reasons; to keep employees loyal, boost morale, reward performance, and retain top talent to name a few. These bonuses are not tied directly to work performance and are given in a variety of shapes and sizes. This could be a percentage of salary or a set, flat amount.
A recruitment bonus is a special incentive offered to a candidate to make sure they choose your company and position. Recruitment bonuses are commonly a one-time cash payment but can also be offered in other perks or remuneration such as transportation, parking passes, or even extra paid time off. This is typically a set amount based on position within the organization. While recruitment bonuses can be viewed as a great tool and a way to get an edge on the new top talent, you should keep in mind current employees and the message it sends to loyal employees. It has its time and place, but especially in smaller organizations, not to be taken lightly.
A referral bonus could be part of a larger referral program. This is a way to utilize your workforce to recruit top talent and typically rewards the employee and the applicant. This is where you give your employees an incentive for referring a qualified applicant. You also typically give an incentive to the referred applicant but establish timeline benchmarks with graduated payouts for both parties. This establishes a stake for the new and existing employee. We recommend programs be built to set guidelines and parameters where timelines and payouts are clear. Another point to evaluate is who is eligible for the program and typically leaders, hiring managers, and human resources are not part of the eligible participants as that is within the scope of their role and expectations. Considering what could be budgeted for advertising, recruiting, and other efforts in hiring new talent, this is a plan that can be more affordable than you may think.
Whether you are looking to retain talent or seek new talent, weigh your options. What is your budget? What can you afford to offer and what cost will it have if you do not have the talent you need for your organization?
The current job market is difficult and ever-changing. Contact Us to help navigate possibilities on how to deploy a bonus program to increase recruitment and retention strategies or in developing a policy to provide consistency for your business. Give us a call at (800) 317-1378 x14.
* Bonuses of specific monetary value can have tax implications. Complete research and taxes when evaluating these offerings.