Sign-On Bonuses: What They Are and How to Negotiate for Them

When you’re negotiating a job offer, you may encounter a sign-on bonus. This is a one-time, starting bonus the employer may include as part of your total compensation package. It could be given to you as a lump sum or as a series of installments. It could also come in a different form, such as stock options. 

Companies typically offer you a sign-on bonus to incentivize you to accept the job. While it’s a one-time bonus, it won’t factor into your overall salary, so when negotiating raises in the future, your base pay will be the starting point.

Why will they benefit you?

“We offer [a sign-on bonus] when we are constrained by the pay band/budget for the role,” wrote an FGB member who works in HR. “It's a way to say we really want you without blowing the budget or messing up internal equity.”

“Sign-on bonuses are becoming the norm due to the COVID scene and the change in many industries,” Terra Wolfe added. “They can be about retention, but they can also be about attracting the best talent, too. It never hurts to negotiate if you feel strongly about your stance and give them strong reasons to consider. 

In other words, sign-on bonuses can help you get the payment you deserve, even when the employer doesn’t have the budget to accommodate your initial request.

When and how should you negotiate a sign-on bonus?

You should always negotiate a job offer, especially when the salary offered doesn’t match your initial request or expectations. Typically, you will want to start by negotiating the salary itself. Then, if the employer won’t budge, you may ask for additional benefits and/or a sign-on bonus.

An employer may be more willing to give you a sign-on bonus than additional compensation because it’s a one-time deal. When you ask for the bonus, make a solid case for yourself, reminding them of your qualifications and the value you bring to the company. They wouldn’t be offering you the job if they didn’t believe you have the necessary skills and experience.

“Women don’t always negotiate or feel comfortable with it,” Wolfe said. “If you feel you are being lowballed then it’s a good time to discuss the average industry salary and your education level that support you receiving more salary. Do your research on the company and also the work-life balance of current and previous employees to see if there are any red flags.”

Should you accept a sign-on bonus in lieu of a higher salary?

At the same time, make sure you’re satisfied with the salary itself. If you’re not, the sign-on bonus is not going to justify the company lowballing you, and you’re bound to be disappointed later on.

You should also weigh the pros and cons. Is this an employer you’re excited to work with? Are you generally happy with the terms? If so, then you could very well be happy with a sign-on bonus in addition to the salary and benefits.

But never sell yourself short. If you’re set on a higher salary and you can’t get there with this employer, then this may not be the right job for you.

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This article reflects the views of the author and not necessarily those of Fairygodboss.

Laura Berlinsky-Schine is a freelance editor and writer based in Brooklyn with her demigod/lab-mix Hercules. She primarily focuses on education, technology and career development. She has worked with Penguin Random House, Fairygodboss, CollegeVine, BairesDev and many other publications and organizations. Her humor writing has appeared in the Weekly Humorist, Slackjaw, Little Old Lady Comedy, Flexx Magazine, Points in Case, Jane Austen's Wastebasket, and Greener Pastures. She also writes fiction and essays, which have appeared in publications including The Memoirist and The Avalon Literary Review. View her work and get in touch at: www.lauraberlinskyschine.com.

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