5 Keys to Consider When Offering Signing Bonuses
It doesn’t bother Charlie Dickey if his employees are primarily motivated by money. In fact, it’s a character trait he targets when hiring.
Dickey, the service director at BMW of South Atlanta, has become a believer in offering employee signing bonuses—especially when his facility needs a certified technician, or service advisor.
“Those positions are getting harder and harder to fill, it seems, every year,” Dickey says of so-called “skilled positions.”
His theory, in essence, is that you’re far more likely to reel in a trophy fish when you use desirable bait.
Offering a signing bonus “shows you’re willing to invest” in top job candidates, Dickey says. “And that you’re not afraid to step up to get quality people.
“It might entice somebody with qualifications we’re looking for to come in and see us and give us an opportunity that, otherwise, they might not have even considered [because] they weren’t really looking for a job.”
Dickey, a 28-year industry veteran, explains what to bear in mind when offering an employee signing bonus.
1. Don't Give Bonuses Needlessly.
Dickey has lured multiple, exemplary employees to work for him by offering signing bonuses―often around $1,000 in saturated markets, and paid out incrementally, over the course of a year. Despite that fact, he makes sure his department doesn’t offer bonuses until it’s necessary. Once Dickey develops a lengthy list of top job candidates he typically stops offering incentives.
“When you have the reputation as the place to work in town,” he says, “that’s when you probably want to stop” offering sign-on incentives.
2. Crunch Budget Numbers Carefully.
When Dickey’s dealership employers have needed top technicians, advisors, or parts employees, they have usually monitored their budget closely before offering signing bonuses. As Dickey has learned, every dealership staffer represents an important financial value—such as average gross per advisor, for example.
“So, you’ve got to build a business case; if you don’t have that person, how much is it costing you over this time frame?” Dickey notes. “Over this time frame, what [could a new hire] generate you in additional gross? And then you’ve got to figure that into your cost of hiring that employee.”
3. Be Wary of Bonus Chasers.
While Dickey doesn’t mind employees that are motivated by money, he’d prefer that money wasn’t their sole focus. The last thing he wants is to offer a signing bonus ranging from $1,000-$15,000 over 12 months, only to have a relatively new hire jump ship. That’s why the service director studies resumes closely, and typically avoids candidates who have a tendency to job hop.
“You can tell by their job history,” he says. “If they switch [jobs] quite often, from city to city, that’s an indication.”
4. Spread the Word.
Offering a signing bonus can be a fruitless effort if it isn’t marketed properly. At BMW of South Atlanta, the dealership’s bonus offers are noted prominently in job ads (typically in the ad’s headline) on websites like Indeed and Glassdoor And, dealership leaders like Dickey make sure to spread word-of-mouth throughout their area.
Dickey says it can also be effective to offer your current employees a spiff, or referral incentive, when hiring, offering perhaps $500-$1,000 if they lure a new hire that sticks with your facility.
5. Explain Your Use of Bonuses.
If a dealership appears desperate to hire, it could turn off top job candidates. That’s why Dickey explains exactly why his facility offers sign-on bonuses—because he seeks supremely talented staff members, who typically already have a job that pays decently. He makes sure to let top candidates know that his dealership is willing to invest in valued employees.
“I run our business, and my [department], like a sports team—you know, you’ve got to always be striving to be the champion,” Dickey explains. “Which means you’ve got to out work, out practice, and out recruit the next team. And, if you ever stop doing any of those things, then you’re not going to be a champion for long.”