What is a signing bonus in a job?

What is a signing bonus in a job?

Job searching leads you to many firms with different salaries and requirements. But if a firm pays you a bonus to sign with them, it is known as a signing bonus. Such rewards get handed out to employees who the firm deems capable. Let’s see What is a signing bonus in a job?

So if you do receive an offer with a signing bonus being a percentage of your base salary, then you might be an attractive candidate for them. But since the term is not familiar to everyone, we will discuss here what the Bonus means.

What is the meaning of a signing bonus?

A signing bonus is handed out to new employees to encourage them to work with the firm. It is usually a small percentage of the annual base salary and gets handed out only once to the new employee.

It is a sort of incentive for the potential employee to opt for that firm instead of any other if you look at it. It also helps motivate the employees to perform even better when they work in the future. So in a way, it is ideal for not only the employee but the employer too.

Signing bonuses became especially frequent after the COvid-19 pandemic hit the world. Due to the pandemic, many companies suffered losses of their workers, so they needed more workers as fast as possible.

To encourage potential candidates to join their firm, they handed out such signing bonuses to candidates. It helped them hire more employees and work efficiently. Aside from the pandemic, such compensations may be possible in other situations too.

Why do companies hand out signing bonuses?

As an employee or job seeker, you must be wondering why companies give out such bonuses to employees. Technically, it would be an extra investment for the company, so is there any reason for it?

Well, the employee may benefit from the Bonus, but it is also beneficial for the firm. Especially in times like these, when there is a deficit of workers already, firms need to strengthen their workforces.

So having employees, and skilled employees become essential. Here are a few reasons why companies give out signing bonuses to their employees:

  • To Attract Skilled Workers– For a firm, finding the perfect employee is essential to ensure the highest-quality output. Hardworking and skilled workers may be abundant in the world, but so are firms. So to stand out from other firms, they need some leverage. Thus, they turn to sign bonuses to attract potential employees. It is a way of showing appreciation for a potential employee. Such bonuses help them secure skilled employees to their teams and work with them.
  • To Strengthen Their Workforce– In situations like the worldwide pandemic, firms face extreme losses due to a lack of workers. The workload becomes extensive on employees, and it only leads to further resignations by employees. They need to balance the workload and add more people to their team. So they attract potential employees with a signing bonus. It is ideal for companies to gain more employees to share the workload of other employees, leading to perfect results.
  • To Start with A Handsome Salary In Hand– Salary negotiation is an essential part of deciding whether you will take up a job or not. When funds are already tight, firms may not be able to provide you the salary figure you want. So, as compensation for that gap, they pay a signing bonus. It does not go for years, but it does help a middle ground with the potential employee. In such a way, both parties can reach an agreement without facing issues.

What are the benefits of signing bonuses?

Now that you know why you received the signing bonus offer from a firm, you must be curious if it is ideal for you or not. Technically, it is a sum of money so that it wouldn’t be of any harm. And here are all the benefits of these bonuses to help you make your decision:

For Employees

If you are a beginner at job search, you might be new to the concept of signing bonuses. So when you do receive an offer, you might wonder if the request is safe to take. You must consider a few factors, but generally, it is a sweet deal for employees.

Here are the reasons why you should opt for jobs with signing bonuses:

  • The Bonus Is an Extra Incentive– Just like you receive year-end bonuses to appreciate your hard work, a signing bonus is an incentive to celebrate your employment. IT is a percent of the base wage added and given to you when you enter the firm. It can range anywhere from %5-%20 of the base salary. Some firms are even willing to pay higher signing bonuses to an employee. All in all, it is ideal to receive an extra sum apart from your usual salary.
  • The Bonus Means That the Company Realizes Your Skills– Signing bonuses may be frequent in the pandemic, but before it, they were not. It is because these bonuses were usually for employees who had exceptional skills. To avoid such a precious employee from going to the competitor, firms provided such bonuses. And it worked well in both parties’ favor. So if a firm did reach out to you and wants to give you such a bonus, it is likely that they appreciate your skills and efforts.
  • The Bonus Can Make Up for Salary Disagreements– Usually, reaching the middle ground while salary negotiations are tough. You might not always get what you might have dreamed of in terms of salary. So, you can make up for that gap that you might experience through the Bonus. It may not be much, but it is still good enough to start with. This benefit applies to the firm as well since it could help them reach an agreement with the employees.

For Employers

Since employees do benefit from it, employers also benefit from such bonuses. It is why they give out such signing bonuses in the first place. They might seem like an additional expense to anyone, but firms profit from bonuses more than you would imagine:

  • The Bonus Helps the Firm Sign Talented Employees– When a firm finds a skilled employee with talent that would help steer them in the right direction, it is an essential opportunity. But the employee may still be searching for jobs actively. So to pull the employee to their firm, using signing bonuses is the best way. It helps a firm show their support for a skilled employee and help them sign with the firm. It does ultimately help the firm progress.
  • The Bonus Helps the Firm Stand Out from Competitors– Also, when firms evaluate and find a perfect employee, there is a constant fear of losing them. There are so many other firms with similar posts that may give the employee a better offer. So, to ensure that they do not lose such a precious worker to another firm, firms utilize signing bonuses. It also helps them acquire a worker who would help them be better than the competition and rise.

Should you accept an offer with a signing bonus?

The decision is up to you if you do or do not want to accept an employment offer. It is generally ideal for accepting a job offer with signing bonuses as they are rare. So you could consider saying yes to the employment offer.

However, you must keep in mind that you should consider other factors too while looking at the signing bonus. Many employees focus so much on the Bonus that they fail to notice other perks. Ensure to double-check factors like your salary and other benefits.

If you evaluate a job solely based on the Bonus, you might not notice some demerits. So carefully see your responsibilities, salary and other features of the job to decide if it is worth taking up.


Signing bonuses are an attractive offer to any new employee. They are one-time payments made just when an employee enters the company to help them choose the firm over others. And it works efficiently in doing so too.

So now that you know what signing bonuses are, you can decide if an offer is ideal or not. As long as you remember the pros and cons of such bonuses, you can decide whether the job offer is worth accepting or not.

Frequently Asked Questions

No, not all firms offer a signing bonus to their employees. Since it isn’t a necessary payment, only those who deem it necessary offer it to their recruits.

  • Do you receive the signing bonuses every year?

No, you only receive the signing bonus when you enter the firm once. It is a one-time payment and does not mean that you would receive the Bonus with your salary each year.

  • Are signing bonuses ideal for new employees?

Yes, signing bonuses can be seen as a way an employer appeals to a potential employee. If you receive such an offer, your performance has impressed the company. So it is generally ideal to choose such offers.

What is a signing bonus in a job?

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