Have/would you pay a "signing bonus" to a candidate to get a deal done?

I'm hearing about this more and more and would be interested to see what's going on with RBC.

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Comment by Tim Spagnola on February 15, 2012 at 11:18am

This is a great question Chris and curious what others can add for input. I had this suggested to me a year ago by a split partner and I said no way. It was really a case of not wanting to open this door with that indvidual. I also had a former colleague that worked in the financial sector that made this a regular practice. He was of course getting HUGE placement fees so meant little to him, but would love to hear from others on this topic.

Comment by Ron Webb on February 15, 2012 at 11:22am

I think it is a risky thing. I have done it 2-3 times in the past 15 years. Memory tells me it was to help with relocation expense or help repay a sign on bonus the candidate would owe for changing jobs too soon. I am sure I used it as an enticement, but I must have been very comfortable that the candidate would go and stay beyond the guarantee period. I don't think it should be routinely offered for enticement purposes.

Comment by Christopher Poreda on February 15, 2012 at 11:28am

How about this scenario...your client and your candidate love each other but are are 5K apart on a 40K fee.  Neither is budging.  Do you pay the 5K and pocket 35K or risk losing the entire fee?  I've done it perhaps 4 times in 12 years just to make the deal happen and all were very successful placements.  But I paid it out at the expiration of the guarantee period and 1099 the candidate. 

Comment by Sandra McCartt on February 15, 2012 at 12:44pm
Somewhere in the misty past I think somebody told me this was illegal. May have been part of a code of ethics styled after the fee splitting regs for attorneys so must not be any kind of law. I have thought about it several times but it didn't sit quite right so I didn't do it. However, I have a candidate getting an offer today who will have to walk away from a 15k bonus from last year to take the new job. My client is aware and is offering a sigm on bonus to ease some of the pain. It will not be as much as he is giving up so I may sweeten the deal, but I am not going to do it until after he accepts. I don't want it to be the deciding factor or an enticement. I will pay it at the end of the 90 day probation period if I do it.

Something about doing this that would make me wonder how my client felt about it if they know it. Might be regarded as helping them close the deal, might not. I wrestle with it.
Comment by Christopher Poreda on February 15, 2012 at 12:49pm

I agree Sandra but think in the end, it's the success of the placement that matters and if the client did know one could spin it as a determinant factor in our commitment to our client's success.  Face it, we all work for money and I've had occasions where a client saw the value and loved my candidate but pay scales, budgets, etc. wouldn't allow it to happen.  Would they be upset if I made up the difference?  Would love to hear from some internal folks.

Comment by Sandra McCartt on February 15, 2012 at 2:14pm

I know Chris, and believe it or not this is one that i am on the fence about.  I have had situations where the client could not pay a hiring bonus or hit the salary range.  They have asked me to increase the fee % and turn around and pay the it to the candidate rather than try to get approval for a hiring bonus.  I have been happy to do that and do 1099 the candidate.  But that was at the request of the client so somewhat different.  I have made that suggestion to clients.  Some are great with it some are not becasue they have strict limits on % of fees that they can pay.  I would love to hear what interal people have to say about it also.

Comment by Bill Schultz on February 15, 2012 at 3:06pm

No- I may do it if I were selling real estate or some other B2C service.  But the company is paying the fee eith OPM (other people's Money).  To me, It's a lazy negotiation practice.  

Comment by Christopher Poreda on February 15, 2012 at 3:40pm

Really Bill?  BTW, in real estate you would use your license.  OPM?  If I were to hire a recruiter to fill a position I would be paying with my money; not some nebulous beings.

This isn't a question about a "practice".  This is a question about the rare case where it's a great fit we're just a few dollars apart.  Companies sometimes have no flexibility for a variety of reasons.  You would walk away from a 35K fee for 5K?

Comment by Bill Schultz on February 15, 2012 at 4:31pm

Yes really, Christopher. I don't understand what you mean by use my license.  If you meant "lose" then you're wrong.  Agents cut their commission regularly to close a deal.  But that's a different scenario 

As far as you paying with your money, then I wouldn't recruit for you.  

To your example, would the client or candidate walk away for 5k?

Comment by Christopher Poreda on February 15, 2012 at 4:41pm

Come on Bill...is "eith" a word?  But I know what you meant...sometimes we type a little quick.  This isn't about cutting your commission.  This is about offering a sign on bonus to your candidate.  I don't know what you mean by "paying with your money".  Every company pays with their money.  I'm confused. As for client and candidate walking for 5...happens all the time.  In any event, I appreciate your participation.

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