Fifty-five percent of the 276 employers participating in the annual poll plan to offer signing bonuses to new college grads—almost a double-digit increase from 2007, when 47 percent of respondents said they would offer bonuses.
“More companies believe that offering signing bonuses gives them an edge in this competitive field,” says Andrea Koncz, employment information manager at NACE. The Bethlehem, Pennsylvania-based association published the report January 25.
Not only is the number of employers offering signing bonuses on the rise, the dollar amount also is climbing. Signing bonuses will average $4,450, according to survey respondents, up from last year’s average of $3,568.
The trend doesn’t mean employers are indiscriminately offering signing bonuses, Koncz says. Two-thirds of survey participants expect to be selective when assigning bonuses. Factors such as college major and a candidate’s degree level will play a role.
Koncz says employers in IT and computers are most likely to provide signing bonuses. “There is a shortage of graduates in math, engineering and sciences,” she says. “They’re going to have to make themselves as attractive as possible to this audience.”
Signing bonuses may be particularly important for companies that are not in the business of technology and innovation but still need IT talent.
“Science and engineering majors are going to naturally gravitate to the employers they consider cool and hip, like Google and Apple,” says Carol Barber, executive vice president at Bernard Hodes in Inverness, Florida. “Financial incentives could help the less cutting-edge employers make a compelling case for themselves.”
Increased signing bonuses don’t surprise Heidi Hanisko, director of client services at CollgeGrad.com, an online job search service for college students and recent grads in State College, Pennsylvania.
“Companies are constantly telling us how difficult it is to attract and retain young talent,” she says. “Candidates are responsive to financial rewards.”
Koncz says there’s a likelihood that the number of employers offering signing bonuses this year is greater than what the Job Outlook 2008 survey is projecting.
In 2007, 47 percent of respondents planned to offer signing bonuses; ultimately, 54 percent used them. The year before, 44 percent of survey participants predicted they would offer bonuses, and 47 percent wound up doing so, she recalls.
The spate of signing bonuses looks strong now, but that could change if a recession hits, says Steven Rothberg, CEO of CollegeRecruiter.com, a Minneapolis-based job board.
Employers could pull back, particularly because college graduates tend to be recruited for entry-level positions.
“Entry-level employees are the first to get hit during a recession and the last to rebound,” Rothberg says. “We’ll see what happens in the coming months.”