Pros, cons of using signing bonuses to attract employees

Everywhere we turn, store fronts and restaurants are posting signs seeking applicants for vacant positions. And the phenomenon isn’t limited to just the service industry. Employers in the transportation, logistics, and manufacturing sectors are just as desperate for applicants. One suddenly hot recruiting tool is paying signing bonuses to new employees. But there are some factors you need to consider before offering the bonuses.

Bonuses popular in Arkansas

Arkansas is one of the leading states for using signing bonuses, according to a recent article in The Wall Street Journal (“This Summer, Jobs Come With a Hefty Signing Bonus,” July 1, 2021):

Nearly 20% of all jobs posted on job search site ZipRecruiter in June offer a signing bonus, up from 2% of jobs advertised on the job search site in March. The states with the highest shares of job listings that include a signing bonus are Iowa, Missouri, Vermont, Wyoming and Arkansas, according to ZipRecruiter labor economist Julia Pollak.

Signing bonuses of $500 to $1,000 are becoming increasingly common for hourly workers. But going forward, you should exercise caution.

Applicant shortage may be short-lived

You should approach new hire bonuses deliberately and exercise due caution. First, the immediate worker shortage may be only temporary. Expanded unemployment benefits that have been available to help people weather COVID-19-related layoffs often have been so generous that they now serve as a disincentive for people to return to work.