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Salary negotiations: is it a good idea to get a signing Bonus

Updated: Aug 23, 2023

While many of us focus on base salary during negotiations, a less explored but highly effective tool is the sign-on bonus. This one-time incentive can make a meaningful difference in your overall package, and understanding its nuances can offer an edge.


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When is it a good idea to get a Signing Bonus?

At a glance, a higher base salary might seem more attractive than a one-time bonus. However, there are scenarios where a sign-on bonus can be more advantageous:

  1. Flexibility for Employers: Large corporations often have rigid salary bands for specific roles. Asking for a higher base might push you out of that band, making negotiations tough. Sign-on bonuses provide an alternative solution that doesn't alter these bands.

  2. Tax Implications: While sign-on bonuses might be subject to higher taxation, being aware of this allows you to ask for a slightly larger bonus to compensate for that difference, ensuring your take-home pay aligns with your expectations.

  3. Immediate Financial Relief: If you have immediate financial needs, like paying off a debt, a sign-on bonus can offer a quicker solution than waiting for a monthly salary.

  4. Leaving income at Current Job: If the timing of performance bonuses don't line up, you might be leaving a substantial amount of money at your current job. A sign-on bonus can help you bridge the gap.

The "Catch" of Sign-On Bonuses

I often get asked if the question,: "Is there a catch?" The simple answer is, sometimes. Companies might attach conditions, like requiring you to stay for a certain duration or return the bonus if you leave prematurely. It's not a big one though - you can negotiate that out.


Step-by-Step Guide to Negotiating a Signing Bonus

  1. Add the possibility of a sign-on bonus into your strategy as you prep: When creating your offer buckets or MESOs, include sign on bonus as an element in your ask.

  2. Develop your why: Why should the company offer you a bonus? Maybe you are leaving money behind at your current job, maybe your skill set is in high demand, or perhaps you're filling a role that's been vacant for too long.

  3. Approach with Confidence, Not Entitlement: Probe for flexibility first. Approach the conversation with a willingness to understand the employer's perspective.

  4. Discuss Terms Clearly: If the bonus comes with conditions, understand them thoroughly. If possible, try to negotiate terms that are favorable for you.

  5. Consider the Entire Package: While the focus here is on sign-on bonuses, also negotiate other aspects, like professional development opportunities. Can the company sponsor certifications or further education? Such perks can add immense long-term value.

  6. Stay Open to Counteroffers: The company might offer a smaller bonus than you asked for or suggest alternatives like stock options. Stay open and evaluate the entire package's value.

Beyond Signing On Bonuses: Professional Development


I always recommend that you should consider professional development opportunities when you are negotiating your compensation package. Your compensation does not have to be just about the money; it could be about growth opportunities. Particularly in larger companies, professional development can pave the way for future promotions and salary hikes. Whether it's courses, workshops, or certifications, make sure to bring this into your negotiation. Investing in your growth is a win-win; you enhance your skills, and the company gets a more knowledgeable employee.


Final note - Signing bonuses for internal transfers


I frequently advocate that it is a good idea to get a signing bonus during internal transfers. Typically, these transfers don't result in significant salary increases, particularly if it's a lateral shift. To account for the steep learning curve and the broadening of their expertise, employees should consider negotiating a one-time sign-on bonus, ensuring they're recognized for their commitment to becoming a more versatile asset to the company.




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