Category Archives: Talent Supply Chain

Why are we always trying to move up? #SHRMTalent

Posted on by
2

Yo! I’m still out in Denver at the glorious Gaylord Rockies for SHRM Talent. If I don’t make it back to Lansing, MI, there’s a 74% chance I got lost in the Gaylord and I’m thriving off the food small children dropped along the way.

Some common themes coming out of SHRM Talent:

  1. Hiring is hard.
  2. Employees seem changed. Neither good nor bad, but different.
  3. There’s a new normal, but we don’t know what that normal is yet.

One of those things that a lot of folks are talking about is what most of us consider the normal career ladder. You start at the bottom and then you spend the next 40 years of your life climbing up it, and then you die. Turns out, people seem to think that isn’t as glorious as we make it out to be.

The problem is we still view this climb and desire to climb as one of the main characteristics of a great employee. Another problem is people want more and more money and the way to get more money is to get promoted. Another problem is many times the people who want to move up, actually suck at the next level. Another problem is we use the promise of promotion as a way to retain talent when our total compensation isn’t great.

We’ve got 99 problems, and moving up the career ladder is one big one!

How could we burn down the ladder and create something else?

If I had this answer, I would not be writing blog posts from the desk at a Marriott hotel in Denver on a Tuesday evening! Let’s be honest.

What I know is the future of talent development is going to look different. There will be ways for employees to move horizontal, down, and on an angle, not just up. We will figure out the compensation stuff. I mean we already have, but we get caught up in traditional compensation design and philosophy, another problem. Traditional labor seniority systems really did a job on us over the decades! We fight constantly to stay within those constraints at all levels and within all industries.

I think it starts with us developing employees around a concept of professional competence and skill development, and not around the next level up within the organization. There use to be a time in our world were we valued mastery. We devalue mastery in today’s world, and we overvalue one’s ability to navigate the path upward. Our children are taught that they should strive for and desire upward levels. Instead of reaching mastery within a field.

That’s a hard organizational culture shift to make happen.

I think the tech world might have a better chance of reaching it faster. In that world, the value of mastery is greater. You can be a master developer and definitely make more and bring more value to a company than the manager of product management. And that’s not dumping on someone who wants to lead people, because we all know how difficult that is as well. But, just because you lead people doesn’t mean you necessarily are more valuable than the people you lead individually.

It’s such a complex and difficult topic, which makes it fascinating to talk about the future and its potential. To work in a world where each person is valued on their individual skill set and not based on the level of organizational ladder achievement would definitely be something to see. I think we all know some managers that would be in for a pay cut!

Should Corporate Recruiters Get Paid Salary & Commission?

Posted on by
1

First, shoutout to @Hervbird21 (Recruister) on Twitter for starting this conversation (Editor’s Note: Hervbird21 I don’t know who you are but send me a note and I’ll share your LinkedIn if you’d like) Also, take a look at the Twitter thread as there are some exceptional recruiting thought leaders who had thoughts on this subject.

Link to the thread

I’ve written about this a number of times over the years, but with the recruiting market being so hot right now, I’ve actually had a number of Recruiter compensation calls with corporate TA leaders trying to figure out three main things: 1. How do we retain our recruiters; 2. How do I attract more recruiters; 3. How do we reward great recruiting performance?

First, I’m all in on the fact that recruiters should be paid in a pay-for-performance model. That doesn’t mean that corporate recruiters, agency recruiters, and RPO should all be paid the same way. All three of those roles are different and should be compensated based on what the organization needs from each recruiter.

Let’s take a look at the Pros and Cons of Performance Pay for Corporate Recruiters

Pros:

  • You get more of what you measure and more of what you reward.
  • Your best recruiters will be compensated more, and higher compensation is tied to longer tenure.
  • Low performers and internal recruiters who actually hate recruiting will hate it and self-select out.
  • It will most likely raise individual recruiting team member performance in the aggregate.

Cons:

  • You will most likely have turnover with this type of change
  • Potentially, you could get behaviors that aren’t team-oriented. (IE., senior recruiters not helping junior recruiters)
  • Potentially, you could lower your quality of candidates as recruiters move quickly to gain performance comp. (the quantity over quality argument)
  • It actually might increase your compensation budget, initially, until you can find the model that is most effective.

Okay, wait, why did I say “potentially” on the Cons? Primarily, because it truly depends on the model design. Just making a decision to pay more for hires is ridiculous and leads to bad outcomes. But, developing a model that rewards individual performance that is based on recruiting behaviors that lead to better hires, quickly, and in a team setting, well, now you diminish the negative outcomes of pay for performance.

How could we make pay for performance work for corporate recruiters?

I’m not trying to dump on all the folks who commented on “Quarterly Bonuses” but stop that! “Quarterly Bonus” really means, “I don’t want to be individually measured and held accountable, but I also want more money on top of my great base salary”. Quarterly bonuses in most corp TA shops are a joke. They are usually based on Hiring Manager satisfaction and days to fill, two of the most subject measures that have zero correlation to better recruiting.

Also, internal recruiting pay for performance is not just a modified agency or RPO model. Corporate recruiters do much more than just recruit in most TA departments, so if you reward them to just recruit, understand, you’re just standing up an in-house agency model. Your internal recruiting model for corporate has to be unique to the job.

Some thoughts and ideas:

– Spend a bunch of time deciding what you actually want from your recruiters and from your function as a whole. Those two things must be aligned.

– Before going to a pay for performance model you need to get your arms around your recruiting funnel data. Otherwise, you’re just guessing at what and who to reward.

– In most cases, you can’t make the rewards the same because recruiters have different requisition loads and levels of position. Also, in most cases, certain areas of your organization hire at different times. So, get ready to test and be flexible to do the right thing at the right time.

– It’s okay if a recruiter makes more than you think if the model is producing what you want it to produce. Too often I hear from TA leaders that are like, “Jill is making too much!” But, Jill it killing it and the top recruiter.

– If you can’t get your head around paying for hires, pay for the behaviors and activities that lead to more hires.

– Start with a month or quarter test, make sure during the test no one will lose money. The goal is to try and reach some sort of outcome of better performance, to see if it can work. If they are only concerned they might make less money, you won’t truly see what can work or not work.

– It’s not about quality or quantity. It’s about quality and quantity. I’ve never led a recruiting team in a corporate or agency where good recruiters would ever send a crappy candidate on purpose. That just doesn’t happen, normally. If it did, that recruiter didn’t belong on the team.

I don’t believe in recruiting “team” rewards as pay for performance in most cases. Most teams are not designed and measured for “team” performance, so many on the team are getting the reward for a few doing most of the heavy lifting. You can still have team rewards, but you truly have to think about how you reward your most effective recruiters, short and long-term.

I think the ideal ratio for compensation for corporate recruiters should be 75% base salary and 25% pay for performance, where your best top recruiters can make 125% of their normal total comp if they are killing it. As I mentioned above, you will have recruiters quit because you have “recruiters” on your team that didn’t take the job to recruit, but to administer a recruiting process and collect a nice base salary.

Okay, tell me what I missed in the comments or if you have a model that is working you would like to share with everyone!

Mailbag: Can an experienced Recruiter be any good with 378 LinkedIn Connections?

Posted on by
3

I had a Talent Acquisition Leader reach out to me this week. She is having a hard time hiring recruiters and was looking for some insight. Now, she was looking for more of a professional generalist recruiter. Someone who can hire some hourly, but also corporate positions that include: finance, IT, operations, marketing, etc.

She mentioned she had gotten a resume of a recruiter who had four years of experience, but when she looked her up on LinkedIn, she only had 378 connections. Could this recruiter be any good with so few LinkedIn connections?

The Answer

No.

Okay, before you become unglued, let me explain.

Let’s say this four-year recruiter was only hiring high volume hourly. That would mean this person would never spend time on LinkedIn, since hourly workers, for the most part, do not have profiles on LinkedIn. So, now you’re thinking, “yeah, Tim, LI connections don’t matter for this person so they could be a great recruiter!”

Still, I say no!

Because, for me, a great recruiter builds a network of other recruiters and sourcers to constantly learn from. It basically takes almost no effort or skill to connect with 500 other recruiters, sourcers, HR pros, and your personal network on LinkedIn. Once you get to the 500 mark, no one knows if you have 501 or 30,000.

I challenge my own entry-level recruiters that have no recruiting experience to get to 500 connections as quickly as possible. Within six months, they should be able to do this very easily. So, if you run into a recruiter who is three or four years into their career, and they are under 500, they are showing you that they probably have very little interest in expanding their network and learning from others.

500 LinkedIn connections are like training wheels for a recruiter. I don’t expect every profession to have over 500, but recruiters, sales pros, and people looking for jobs should always have over 500. There’s no reason not to, it’s literally the easiest professional networking available to everyone for free.

Do more LinkedIn connections then equal someone is a better recruiter than another?

No.

But, wait, you just said…

Recruiters, of all types, need to get to 500. After that point, it really becomes more about the quality of the connections that you build. If you just accept every Open Networker on LinkedIn, that network will be full of Life Coaches and Pyramid Scheme sellers!

Great recruiters build networks that help them learn more and recruit better. I would say once you establish a network, you then become much more selective about who you invite and which invites you to accept. Right now, with my network that runs over 20,000, I only accept about 1/3 of the invitation requests I get based on the criteria I want in my network.

I know recruiters that quickly maxed out their LinkedIn networks with garbage and had to go back and scrub their networks, and it’s very time-consuming. But, I also see recruiters who switch industries and skills who do this as well. Your network should grow and change with you based on where you are at in your career.

So, LinkedIn connections matter and they don’t. That’s just reality in today’s world of recruiting. Whether you are recruiting doctors or truck drivers, you should still be using LinkedIn for your own professional development on an ongoing basis.

The Most Brilliant Talent Tips Condensed Into Tiny Sentences!

Posted on by
3

I wrote a book with a lot of words. One I discovered is that people love for you to have a book, but no one really wants to read 60,000 plus words. They want you to break it down to about 500. “Just tell me what I really need to know!”

Okay – Here you go:

  • Always give personal feedback to candidates you’ve interviewed but didn’t hire. 
  • Make every candidate believe you desire them until you don’t. 
  • Job advertising works. Programmatic Job Advertising works best. 
  • You don’t hire the best talent; you hire the best talent that applied to your jobs. 
  • If your team only uses 50% of your ATS, it’s not an ATS problem, it’s an adoption problem. (which means it’s a leadership problem) 
  • Measuring the recruiting funnel will give you far better results than measuring days to fill. 
  • Only hire Sourcers if you truly have recruiters willing to do outbound recruiting. 
  • 90% of your recruiting is inbound recruiting, but your hiring managers believe 50% of what you do is outbound recruiting. 
  • Your diversity hiring woes can be tied specifically to certain hiring managers, but we are too afraid to connect the dots politically. 
  • 99.99% of candidates will never accept a job without first talking to a real person. Call volume, in recruiting, matters. 
  • If your sourcing tech is failing, it’s not a failure of the tech, it’s your recruiters hate doing outbound recruiting. 
  • They key to being a great recruiter is getting someone who doesn’t know you to trust you with their career. 
  • A candidate will always respond to a hiring manager more than a recruiter on average. They’ll respond to the CEO of your company even more than a manager of a function.
  • On average, there are worse selection strategies than hiring the most pretty people you interview.
  • The most underutilized recruiting resource you have is your own database of clients.

What is your favorite tiny piece of talent advice? Put it in the comments, and I use it in my next book which will only be 2,000 words!

What Will Be Your Big Unlock In Recruiting?

Posted on by
Reply

Okay, the first thing you’re asking is what the heck is an “Unlock”, right? Well, an “unlock” according to Scott Galloway is:

“An unlock is the discovery of an accelerant for the brand, product, or service invisible in plain sight. The mold on cheese curing disease was a substantial unlock (penicillin). So is administering a small dose of a pathogen to immunize someone from the complete, more harmful pathogen (vaccines).”

An early unlock in recruiting might have been the concept of “poaching” whereas there was a time when it was considered unethical to recruit someone away from a competitor that wasn’t out actively looking. Basically, if they contacted you it was fine, but you couldn’t cold outreach to them. Sounds silly today that was an unwritten recruiting rule a few decades ago!

Another “unlock” in recruiting a few decades ago was the concept of using a candidate’s references as potential leads/referrals to other candidates. For decades we just called references for the simple fact we wanted to actually get an employment reference on a candidate, then all of sudden we were doing that, but also trying to recruit the reference as well!

The biggest unlock of the pandemic for TA was understanding as more and more positions went remote, we could now recruit talent from anywhere, potentially increasing the level of talent we could hire, and sometimes reducing the cost of salaries by hiring folks in less expensive markets.

What will be your Recruiting Unlock in 2022?

Each organization is kind of on its own recruiting evolutionary timeline. While you might have had an unlock years ago, some organizations will just discover that unlock this year. An example would be the reference check one above, many organizations are still just doing reference checks for reference checks! Some have taken those contacts with potential candidates to the next level.

What are some possible Unlocks for you this year?

  • Using marketing automation and nurturning campaigns to make more hires from your ATS database.
  • You’ll use a multi-channel approach to contacting candidates – Email, Inmail, text, phone, Facebook messaging, What’sApp, etc.
  • You’ll stop just posting jobs on job boards and start using Programmatic Job Advertising to discover potential candidates where they are on the interent, not just active candidates searching for jobs.
  • Finally using the data you collect to make your TA more effective and efficient, and not just reporting for the sake of reporting.
  • You’ll actually train your recruiting teams to be better recruiters using sites like Social Talent and SourceCon.
  • Maybe you’ll finally demo and purchase a Sourcing technology tool to help you discover talent in your market you had no idea was there.

But, the question is still what will your unlock be this year!?

I think the biggest unlock most organizations need to figure out is how they better utilize their most expensive resource, your own ATS database. Basically, for most, the candidates in there are just sitting there dying a slow death. We spend so many resources filling these databases with talent and then we do nothing with it.

If I’m not going to do anything with it, it’s basically worthless. If it’s worthless, then let me play around with it and see if I can find a way to get a better value out of it! Here are some ideas:

  1. Invest in an AI driven matching engine and activate your database again.
  2. Get a few local TA leaders in your market and start sharing talent amongst each other. Meet once a month, everyone brings a USB drive with 500 candidates on it and exchange, who knows maybe getting another 1500-2000 free candidates a month will land you some more hires!
  3. Give your ATS database to your marketing team and let them sell to every person who ever applied to your jobs. At one point these folks were saying, “Hi, I love you, I want to work for you!”, so at a minimum marketing has a positive sales database to tap!

Hit me in the comments with any ideas you might have that could be a great unlock for 2022!

What if you allowed anyone in your company to hire?

Posted on by
3

Let me walk you through a scenario and you tell me what I’m missing.

We all have hiring needs right now. Almost all of us are struggling to fill those needs. We love employee referrals! We also have great employees, doing great work who work with us, that we trust.

What would happen if we went to our employees and said, “Hey, we love you and trust you, so we are going to allow you to hire one person. You have total say in whether this person gets hired. We have a few parameters around HR stuff, drug screen, background check, etc., but the hiring decision is yours”.

You could probably add in some fun parameters like:

  • Here are the positions we have open that you can hire someone for. (IE., you might have some positions you don’t want the run of the mill making hiring decisions on)
  • If your hire fails, you won’t get this chance to hire another person for at least a year, so make it a good one!
  • If your hire succeeds, you will be given the ability to hire another person.
  • Maybe you want to throw some sort of bonus to your folks for successful hires, explain what “success” looks like, etc.

What might happen?

Honestly, I don’t know. I’ve never done it, but I think I would be willing to test it out.

Let’s dig into what we think would mostly happen.

My best guess is you would have some employees who would be like, awesome, I’ve got a friend or family member I think would do a great job, and I’m going to hire them. Yes! Some positions get filled and they have some employee sponsorship that will probably help hold them accountable and be more successful.

You will probably have a few misses. Yeah, I thought Johnny would do well, and since he has a record no one will hire him, but he’s my sister’s kid and I really thought he turned his life around and this was a great chance, but ultimately he’s a loser.

You will probably have some employees who think you are nuts and not serious.

The big question is would you allow this for any positions, or just low/no-skill type of positions? I mean, really, conceptually, it works for any level. If I have a finance position open, and there are certain requirements needed for the job, then it isn’t really that hard to see if the person can conceptually do the job or not with their experience and education. So, it could work for any level job, blue-collar or white-collar.

Does this empower your employees?

Imagine being an individual contributor in your organization and one day you wake up and go to work and you realize you can actually hire someone. I can have that experience of making a life-changing decision for someone else. That seems like it would be pretty powerful!

Do you remember the very first person you ever got to hire? That’s a giant career moment. I tend to think every person you hire is a pretty great career moment, but the first one is big!

I think being able to hire someone would be super empowering and it’s really just a next-level employee referral program. Instead of you just referring someone, just take it few more steps and make it happen!

I tend to look at our current staffing problems with a strong testing mentality. Let’s try a bunch of stuff and see what might work. Most of it won’t work, but we might run into something amazing! Maybe our first test of this concept is to go to a hand-selected group of 10 or 20 employees and give them the first shot. Measure the results, gather feedback, decide if it should be rolled out further or what changes should be made.

All that I know is that early in my career if the CEO came into my cube and said, “Tim, we are going to allow you to hire one person to work here!” I would have taken that assignment very seriously and would have thought that was super cool!

What do you think? Tell me how crazy this is.

Adjust Your Recruitment Packaging!

Posted on by
Reply

I talk to a lot of TA leaders and pros who tend to get stuck when it comes to their employer branding and messaging. They want to be transparent and tell candidates exactly who they are and what these candidates should prepare for. The problem being, they believe if they are transparent then candidates will not want to apply or join their company.

The problem with this type of thinking is every single employee, and every candidate for that matter will look at your company and your jobs through different lenses. Take your most loyal employee of all time (Timmy), the person who loves working for your brand more than anyone. What they believe is their truth. Our hope and dream is everyone sees the world, and our company, the exact same way!

Now, take the employee who is the exact opposite end of the spectrum as Timmy! This employee hates you, the company, their job. They are a walking work cancer. The only question you really have about this employee is can we fire them faster than they might be able to quit.

The reality is, your brand and your jobs are truly no different to these two employees, yet they see it as completely different.

When it comes to your employer brand there are some key things you should not adjust for:

  1. This is who we are.
  2. This is what we stand for.
  3. This is what we do.

The rest is just packaging!

Now, I’m not saying you should put out a video that shows daily ice cream socials and free Tesla’s. That would be lying. But if your packaging of your jobs and your company aligns more with how Timmy sees your brand, that’s the packaging. This world is real for at least one person at your company. It’s not a lie, it’s one employee’s truth.

You can change your packaging constantly. By location, by job, by month, etc. The core of your brand doesn’t change. This is who we are, and what we stand for, and what we do. You might even add to this with some this is what we will do for you or help you become. As long as that’s your core and you can deliver on it.

Each of us works for a brand and a job that can sometimes suck and sometimes be amazing, but mostly is a job that we like fine enough, but not as much as a puppy giving you a kiss, or your child running to you after you’ve been gone on a trip. And that’s okay!

So many of us are struggling to get people to apply to our jobs and come work for us right now, and the truth is, we need to step up our marketing game! We need to make our stuff more attractive! More desirable! We need to adjust our packaging. You’re trying to sell high-end jobs with generic branding, and you’re getting generic results.

TransfoRM Recruitment Marketing Conference! Sign Up Today!

Posted on by
Reply

The World’s largest Recruitment Marketing Conference is Back for 2021! You can sign up for free here using the code “TIMTRANSFORM” to join TransfoRM 2021! The conference will be held on August 5th, coming to you live from DETROIT!

For the 5th year, I”ll be the Emcee for this event, and I’ll also be bringing you the 4th edition of my popular walk & talk series “Recruitment Marketing Bootcamp” and in this episode, I’ll be discussing AI in Recruitment.

TransfoRM is such a unique conference that has been breaking barriers since it was started five years ago, and it has created a community of some of the greatest Recruitment Marketing Professionals in the world. The interaction is tremendous, and I wish more conferences would take note of what TransfoRM does! It’s fast, fun, and informational. No back-to-back, one-hour sessions – sessions that are short and sweet, get to the point, and make us smarter!

Who else will be joining me for TransfoRM 2021 Virtual?

  • Torin Ellis – my friend and who I believe is the top Diversity Recruitment Strategist in the world, will be dropping his amazing knowledge on us!
  • Debbie Tuel – The Chief Joy Officer and the Queen of the Joy Roadshows for Symphony Talent
  • Chad Sowash and Joel Cheeseman – From the popular HR Tech podcast Chad and Cheese
  • Julie Sowash – Amazing disability advocate and star of the podcast Crazy and the King
  • Roopesh Nair – the CEO of Symphony, and one of the smartest dudes you’ll ever hear from in Recruiting!
  • Advent Health will bring you Talent Attraction Strategies you haven’t thought of!

What else? TransfoRM 2022 will be coming back LIVE and if you register using my code “TIMTRANSFORM” you will get $500 off the live event also, for next year, on top of getting into the virtual 2021 conference for FREE!

Even if you can’t make the live event on August 5th, sign up and you can get the content sent to you afterward so you don’t miss a minute of great ideas and motivation!

Playing the Long Game in Talent Acquisition!

Posted on by
4

Yeah, but we need talent NOW!

I hear you. No, really, I HEAR you! And I feel your pain, I also need talent right now. In fact, I have not spoken to one organization since March who hasn’t needed talent. Everyone needs talent, now!

Here’s the thing…

(Editor’s note: This is where Tim will wax poetically about the big philosophies in life and some sh*t.)

It’s not about winning the battle, it’s about winning the war! CEOs love saying stupid sh*t like this, am I right? Actually, we aren’t fighting a war, we’re just trying to fill some jobs, calm down, Cindy! (Cindy is my fictional CEO, FYI) So, we have some short-ish term pain, currently in finding talent. The problem is, most TA leaders and organizations will spend 99% of their focus on this current issue.

When you do this, the current issue, becomes your future issue, because you have no vision or plan to actually get out of your current situation. Your current situation sucks, but you don’t want it to keep sucking. A part of me wants to tell leaders to just ignore the present if they truly want to solve the problem. Just go to your hiring managers and say, “Look, we can’t help you, you’re on your own!” The pain will probably be about the same anyway, but you’ll actually get to build a true plan for solving your real issue long term.

Of course we can’t do that without getting fired by Cindy.

We must play the short game and the long game simultaneously, at least, that’s what the best leaders will do in this time of crisis hiring. You’ll have your team fight the fire, while you truly maintain a focus on the future, ignoring the burning building you’re sitting in the middle of. That’s hard to do, and the only way you get away with it is by constantly communicating you’re working on a “permanent” solution for the crisis for the future.

The reason we don’t play the long game in talent acquisition is that we feel too much pressure to fix the present. The problem is you can’t fix the present, that is beyond broken, you can only fix the future. But, if our c-suite trusts we know what we are doing, we buy ourselves time to do what really needs to be done to fix this stuff permanently. Turns out, they will trust us more if we are communicating our plan for the big fix!

The Long Game Plan

Blah, blah, blah, just tell us the plan!

1. Admit that your stuff is currently broken and a mess, but we’ll have to muscle our way through this crisis in the short term.

2. Have a vision of a long-term plan and solution. We need some belief we won’t be living in this hell forever.

3. Look for some short-term wins for your team. Maybe it’s a new tool, some extra help, something that shows them this time it’s going to be different.

4. Make a timeline of action items. This might be a year or more. If you’re stuck in a crappy, dated ATS contract for the next 18 months, your plan is going to change drastically right away. But, this also gives you time to build the right process, tech stack, and team you need.

5. Get alignment of your plan with finance to secure the resources you’ll need. This actually solidifies your plan in concrete because finance pros are pretty good at following up constantly wanting to know how and when you’re going to use those approved resources!

And of course, constantly communicate publicly what you are doing and going to do. Being a great leader is part execution, part politician, and part being a dealer in hope. And right now, your organization needs some talent hope!

How Should We Structure New-Hire Sign-On Bonuses for Hourly Hires?

Posted on by
Reply

Right from The Project mailbag comes this beauty of a question! Very timely in that so many organizations are moving super fast to add sign-on bonuses for new hires to help them attract more hourly candidates right now. Here’s the actual question:

Dear Tim,

We are looking to offer a new hire sign-on bonus for our hourly hires. I was wondering if you have any advice in terms of what is the best way to do this that one, makes it attractive to candidates, and two, works to help retain these hires so we aren’t just throwing money away?

Thanks for the help,

Mandy

How would I offer an hourly sign-on bonus?

It’s a great question because there isn’t any one correct answer. The correct answer is you do what it takes to meet your goals! In this scenario, without giving up Mandy’s specific details, here’s what I would do:

  • Offer an amount that makes staying on extended UI/Stimulus a non-issue. So, if someone is making $300 a week additional stimulus ($1200 per month), I’m going to pay that on top of our hourly wage.
  • Pay this sign-on as a fraction per hour worked. So, an additional $300 per week would be $7.50 per hour over your normal hourly rate. So, a person who normally makes $15/hr, would be making $22.50/hr until the “sign-on bonus” is paid off.
  • The decision you have to make is how long do you pay this additional extra hourly sign-on addition? One month, two months, until the end of September?! I would pay it for one month and if the person quits and tries to collect unemployment, we would challenge it. The reality is, once someone has worked for a month, there more than likely going to keep working. The ones who really don’t want to work, won’t make it a month.
  • “Tim, we just can’t afford that much”-edition. I hear you, $300 per week is way too much. What can you do? Steal workers from other employers who are making roughly the same as what you pay, but you pay more, just not $7.50 an hour more! Maybe you pay $2/hr more.
  • But, wait, you’re not done! What about your current workers? The reality is, if you start offering a sign-on bonus to new hires, your current employees are going to be upset, especially your best ones! So, you have to make it good with them. More than likely you end up in a compensation track that pays your more experienced people more than your new hires. The key for success here is whoever is getting the best pay must be your best performers, or you get rid of them.
  • Also, you can’t pay your more experienced hourly workers $.50 to $2/hr more if you’re paying new hires sign-on bonuses worth more than that, but you don’t have to pay them the same. The key is to make sure your best workers are being paid at a rate that leads the market, so they can’t go anywhere else for similar work in your market and make the same or more. Pay for performance.
  • Move quickly to make changes to market compensation. In crazy employment times, as we have right now for hourly workers, you can not rely on paid compensation data and services. They move too slow. Pay attention to what candidates are telling you and make some calls to fellow pros around your market to see what folks are paying.
  • Bonus Tip: Have multiple sign-on bonus/retention plans for potential new hires/current employees to choose from! Let’s face it, no one plan will be what everyone wants. So, design three and let them choose. Maybe some want an additional hourly rate, maybe some want a retention bonus paid at the end as a lump sum, and maybe some want something totally different. Get creative!

Brainstorming Idea: What if you paid bonuses for certain activities that lead to the new employee behaviors you wish to have? Show up for the interview, get $50 cash in your hand. Show up to the first day of work, get $100 cash in your hand. Make it through the first week, etc.! Reward based on the behavior you want to happen, and ensure it happens. Yes, payroll will hate you, but it doesn’t mean that it can’t be done!

Yes, this is expensive, but not as expensive as going out of business because you can’t find labor. You can always increase your prices for your products and services to meet this additional demand. Say hello to inflation, it’s going to happen, the current administration made sure of that with a multi-trillion dollar stimulus package!

The key to making sign-on bonuses work is to only pay those bonuses fully to those workers who truly are working. If you start paying that higher wage to slackers, you’ll be dead in the water. People are willing to work market leading wages, but they are also willing to collect market leading wages for not working so hard if you allow it.