The healthcare industry is one of the most competitive fields when it comes to recruiting and retaining skilled professionals—and with 2.1 million job openings, the competition is only heating up. So, if healthcare employers want to stay top of mind in their industry, seeking new ways to attract and retain the best talent is a must. A tactic that’s proven effective in this sector? The sign-on bonus.
Incorporating a sign-on bonus into your job offers demonstrates to candidates that you value them and are willing to compete with other offers they might have. They can also help make up for an inability to match a job candidate’s salary expectation or to pay relocation expenses.
But even if sign-on bonuses can help attract top talent, do they successfully retain talent? Let’s find out.
Utilizing Sign-On Bonuses as an Incentive for Employees
Companies across the country are competing ferociously for the same talent as they try to survive the Great Resignation, and many are turning to sign-on bonuses to stand out. Salary.com reports that 34 percent of companies are offering sign-on bonuses in 2023—not just for new hires but also for retaining existing employees, too.
Sign-On Bonuses for New Hires
It’s true: Data shows that sign-on bonuses effectively attract healthcare professionals, particularly those in high-demand specialties.
One of the greatest perks of offering a sign-on bonus is that it can set you apart from your competitors. This extra edge can make the difference between a candidate accepting your job offer or not, especially in such a candidate-driven market. If a candidate plans to leave their current employer before receiving their annual bonus, offering a sign-on bonus during salary and onboarding negotiations can motivate them to make a move.
Retention Bonuses for Current Employees
Don’t think bonuses can only be utilized for new hires. Let’s talk about the retention bonus.
An alternative to a sign-on bonus, a retention bonus, can be used to retain current employees in the form of lump-sum payments or an hourly increase in pay. If you want to zero in on retention efforts for your current team members, this might just be an avenue your company will want to explore—especially if salary increases aren’t on the table.
Monetary attachment is particularly important in healthcare recruitment and retention as employees may feel undervalued or underpaid compared to their peers. Offering short-term bonuses can alleviate these concerns and help employees feel appreciated and valued, which can increase job satisfaction and reduce turnover.
But Above All, It’s About Employee Recognition
A Gallup-Workhuman research report found that only 36 percent of employees report that their organization has a recognition system in place, with only 21 percent tying monetary rewards to their recognition strategy. This is especially surprising considering Workhuman® research found recognition with financial rewards is 20 percent more effective than e-thanks alone when looking at reducing turnover.
Monetary rewards won’t always be viable, but the data goes to show that frequent recognition and reviews are important in retention, as they provide an opportunity to evaluate employee satisfaction, identify areas for improvement and offer incentives to retain high-performing employees.
Cost Benefits of Sign-On Bonuses for Healthcare Employers
Not only are sign-on bonuses attractive for job candidates in a competitive field, but they also have cost benefits for healthcare providers. Recruiting and training new employees can be expensive, and sign-on bonuses can reduce these costs. By offering a financial incentive, employers can attract and retain employees more likely to stay with the organization, reducing the need for constant recruitment and training.
Retention bonuses can also save costs associated with employee turnover. The cost of replacing an individual employee can range from one-half to two times the employee’s salary. That means losing an employee with an annual salary of $60,000 can cost the organization as much as $120,000—something potentially avoidable with the retention bonus.
Not only that, but high employee turnover can also lead to decreased productivity, increased training costs and lower morale among the remaining staff—so offering retention bonuses can help to keep valuable employees engaged and motivated, reducing the likelihood of turnover.
But There Are Challenges to Consider, Too
Balancing Bonuses With Benefits
While sign-on and retention bonuses can be effective tools for recruitment and retention, we would be remiss not to acknowledge the challenges—one being the balancing act of sign-on bonuses with other employee benefits and perks.
Employers need to ensure that they are offering a comprehensive benefits package that includes healthcare, retirement and time off. However, focusing too heavily on sign-on bonuses can make providing other significant benefits to employees challenging.
Be Strategic in Your Bonus Structure
Another challenge is ensuring that sign-on bonuses are structured to incentivize retention. Simply offering a lump-sum payment may not be enough to retain employees, particularly if they receive a better offer elsewhere. For example, in the short term, a sign-on bonus may be more attractive to job seekers than a higher salary because they will receive immediate cash in their pocket. However, with a sign-on bonus being a one-time thing, it’s more lucrative to have a higher salary than a bonus in the long run.
That being said, employers need to be strategic in structuring sign-on bonuses to ensure that they effectively retain employees while prioritizing other methods of employee recognition and retention. Putting too many eggs in the “bonus basket” won’t cut it.
Healthcare Recruiters International Can Help
Sign-on bonuses can be an effective tool in healthcare recruitment and retention. They offer an immediate financial reward to attract and retain skilled professionals, create a sense of attachment between employees and the organization, and can save costs associated with recruitment and turnover. However, it is important to balance sign-on bonuses with other employee benefits and structure them to incentivize retention.
At HCRI, it’s our job to understand and anticipate those changes to better deliver our specialized hiring solutions—and we know your teams can’t afford to miss out on leading talent. Our expert recruiters have forged key relationships within the industry over the years by connecting the top talent in healthcare with great organizations.
If you’re looking for support in recruiting top talent, contact our team today.
