A signing bonus is a one-time lump sum payment offered by an employer that is separate from regular salary increases. It is an incentive strategy utilized by the employer to pressure members to accept the employer’s offer and settle the collective agreement.
Incentive:
It’s a lump sum payment, not an ongoing part of the salary. Employers want to push this form of payment as it saves them money over the long term.Varying amounts:
The size of the bonus can vary significantly.Negotiation:
Signing bonuses are often negotiated in bargaining.Pros of Signing Bonuses – why do employers offer them?
Perhaps the biggest benefit of signing bonuses is the ability to provide a strong incentive for employees to accept a bonus offer without Employers having to significantly increase long-term financial commitments through offering a higher salary or higher annual bonus.This one-time payment that does not impact long-term payrolling budgets.Cons of Signing Bonuses – why do unions prefer wage increases?
Unions prefer to negotiate wages over signing bonuses. Generally, negotiating for a higher salary is more beneficial in the long run and wages are pensionable and signing bonuses are not.Unlike signing bonuses, higher wages are ongoing investments contributing to the employee’s overall compensation package.Higher wages contribute to employee retention in the long run, as individuals are less likely to explore alternative opportunities.Signing bonuses are considered taxable income and are subject to the same taxes as regular salary.