More firms dangle perks like bonuses to hires
One sign the labor market is starting to get its sea legs back: a return of the signing bonus.
In recent months, companies have begun extending signing bonuses, extra vacation days or other perks in order to fill some management or specialized-skill positions, a number of employers and labor market experts say.
Those sweeteners were more typical of the days before the Great Recession when companies faced tough competition for qualified workers because the unemployment rate was low — below 5 percent — and opportunities were bountiful.
“Over the last couple of years we've noticed a trend toward added incentives for specialized roles we're having a hard time filling,” said Matthew Rimer, senior director of human resources at UPMC Health System.
Perks “all went away by the middle of 2009,” in the recessionary aftermath of the financial crisis, said Terry Glover, who runs an executive search firm downtown. Until a year ago, he said, executive searches were among the lowest he had seen in more than 40 years.
“When businesses were competing more for good people and the economy was doing much better in 2007, it wouldn't be unusual for a person making $65,000 to get a $6,000 or $7,000 signing bonus,” said Glover, who is CEO of W.T. Glover and Associates Inc.
But as the unemployment rate has gradually improved, falling to 7.4 percent in July from a high of 10 percent in October 2009, bonuses and other incentives are slowly making a comeback.
For instance, a metals company in the area paid a $3,000 signing bonus a week ago to lure someone to accept a manufacturing engineer position paying $65,000 a year, Glover said. He couldn't identify the company because of a confidentiality agreement.
In another case, a shale gas company paid a $10,000 signing bonus to get someone to relocate from the Gulf Coast for a job as its operations director, said Eric Gaber, CEO of E&C Executive Search Services, Coraopolis, who also couldn't identify the client because of a confidentiality agreement. The bonus was on top of a $25,000 pay hike to $150,000 a year.
“Some companies have begun offering signing bonuses, higher pay or even company cars for people in positions that normally wouldn't get one to lure them from their current company,” said Gaber.
Employers shed about 8.74 million jobs during the Great Recession, from December 2007 through June 2009, said the outplacement firm Challenger Gray & Christmas Inc.
The Labor Department said about 5.4 million jobs have been added since the end of the recession, signaling a tighter market, especially in some fields where specialized workers are in high demand.
John Challenger, CEO of the Chicago-based Challenger Gray & Christmas, said sweeteners are cropping up in energy and certain health care fields, for instance.
“In just the last few months, we started seeing evidence of companies paying signing bonuses” he said.
UPMC sometimes offers a signing bonus or extra days off “to sweeten the pot” so the health care giant can “compete against other organizations” offering similar perks, said Rimer.
Consol Energy Inc. found that during the region's shale boom over the past three to five years, competitors were granting signing bonuses, so Consol did too, although sparingly, said Mark Hrutkay, director of human resources at the Canonsburg company.
“When you have high-end positions where you need special skill sets and it's a critical situation, you consider a signing bonus,” said Hrutkay.
Like other employers reached for this story, Hrutkay did not want to provide specific examples of their hiring perks. Employers worry that candidates will be more aggressive in demanding perks if they know that companies have been offering them to lure other employees.
Recent reports show worker pay has begun to tack upward, another sign of strength in employment that's prompting some companies to float perks to win over job candidates.
According to the Labor Department, average private-sector wages of $24 an hour in July were 1.8 percent higher than the year earlier at $23.54. Small pay increases occurred in every industry segment, from mining to education and health employers.
Not all workers are getting paid more, however, according to a report from the Economic Policy Institute. Average hourly pay for a person with just a high school diploma dropped 1.6 percent last year from 2011.
But average pay for a person with a college degree rose 1 percent last year. Plus, pay for people with postgraduate degrees jumped 5.4 percent last year — and they tend to be the ones who fill the upper-level and specialized-skill jobs.
Domenic Dozzi, CEO of Jendoco Construction Co., expects to hire a project manager in the next half-year or so for his commercial construction company in Penn Hills, as business has improved somewhat within the past year. While Dozzi does not foresee paying a signing bonus, he anticipates candidates might hold out for higher pay.
“They'll say, ‘If I'm going to move there, I'm looking to make more money,' ” Dozzi said.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or firstname.lastname@example.org.