Tom Pera’s new bartender job comes with an unusual benefit. For taking the role at Cuba Libre Restaurant & Rum Bar in Old City, he’s eligible for a $250 “welcome bonus.”
The signing bonus was a surprise and not what persuaded Pera, a 23-year-old teacher, to take the summer job between school years. But the Fishtown resident plans to use the bonus — which Cuba Libre pays in traditional checks or cryptocurrency — to buy some Bitcoin. He said the incentive is a good way to bring people back to work, especially in industries that haven’t offered such bonuses before.
“I think in the restaurant industry, workers typically don’t feel as appreciated because there’s not much room for growth always,” he said. “This is something that kind of goes towards showing appreciation.”
Before the pandemic, signing bonuses were usually for top executives, professional athletes, or workers in certain industries, such as health care. But with companies struggling to find workers, the signing bonus has been democratized and more employees such as dishwashers, day care teachers, and gas station attendants are receiving the perk. Some bonuses are in the thousands of dollars.
From restaurants to cloud computing companies, some small businesses have run into what seems to be a counterintuitive problem. They can’t find workers, even though unemployment remains at high levels. Some employers blame generous unemployment benefits for keeping workers sidelined. But others point to a lack of child care and say workers in so-called low skill occupations have begun to demand better pay and benefits. That has left some businesses desperate to expand capacity as the economy lurches to life.
US Xpress, a Tennessee trucking company, is offering a $30,000 signing bonus in Philadelphia for a pair of qualified drivers. Hourly production workers can get $2,500 at ILC Dover, a life sciences manufacturing firm in Frederica, Del., that makes aerospace equipment and pharmaceutical packaging, among other things. Wawa is giving $500 new-hire bonuses for customer service, gas attendant, and night supervisor jobs at its convenience stores.
“With this job market, a sign-on bonus is something that is certainly an easy ask for the employee and is something that more and more employers are ready to do, because they’re desperate,” said Brian Clapp, president of CCI Consulting, a Blue Bell-based talent management and human resource consulting firm.
Nearly 20% of U.S. jobs posted on the job search site ZipRecruiter offered signing bonuses in June, up from 3% in March. The increase in hiring bonuses has been much smaller in Philadelphia, rising about a third from almost 3% to 4% of job postings.
Employers said the lump sum payments help draw attention to their job postings, with some advertising the perk in all capital letters. The one-time payments can also be a way to give workers more money without having to pay a higher salary, or causing pay equity issues with existing staffers, Clapp said. Some businesses pay the incentive in installments — over a period of months — to make sure they get some return on their investment.
ILC Dover is unsure whether it will need to make permanent wage increases, or if the tight labor market is temporary, said Steve Maley, the company’s global head human resources. The signing bonuses “can bridge us until we can make that analysis” and put “a lot of dollars in people’s pockets” in the meantime, he said.
“I think we’re very willing to do [permanent wage increases], if that’s ultimately where the market goes,” he said.
Wawa has seen many more applicants because of its hiring incentives, said spokesperson Lori Bruce. The company, which also offers a $500 referral bonus for current staffers, has hired more than 9,800 associates in the past few months, exceeding the target of 5,000 it hoped for this spring. Wawa is offering the $500 new-hire bonus through July 31.
“Our goal with these incentives is to encourage new associates to give us a try, get to know us and experience our culture and realize the growth and development opportunities we have available,” Bruce said.
Other companies said the signing bonuses haven’t helped fill open roles. In the restaurant industry, only 21% of local workers said signing bonuses were very important, when asked what would make the jobs more attractive, according to a recent Inquirer survey. By contrast, 81% said health benefits and paid time off were very important.
Some local employers are not fans of signing bonuses either, arguing they’re unfair to recent hires who didn’t get them. Seer Interactive, a Philadelphia digital marketing company, wants to fill about 25 positions to help meet a surge in client demand. But offering a signing bonus “feels wrong on many levels,” said Wil Reynolds, the company’s founder.
“I like to take care of the team that got me here,” he said. “If somebody came in two years ago and didn’t ask for a signing bonus, because it was a different time and they just accepted the offer, I feel bad about the fact that somebody else who comes in with the same skill set gets another $5,000.”
US Xpress, the trucking firm, said the industry has always offered signing bonuses, but the amounts have never been this high or paid out so fast, said Jacob Kramer, vice president of talent acquisition. The $30,000 one offered in Philadelphia is for a team of two drivers, who take turns behind the wheel so the truck keeps moving, he said.
The company wants to pivot from signing bonuses because they can frustrate drivers, who might not meet requirements to receive them, Kramer said. Instead, US Xpress wants to be up front with how much drivers will earn per mile and when they will get home from trips.
“We have found the culture has been greatly impacted by that. People appreciate that,” Kramer said. “They know what their consistent paycheck is going to be.”
Barry Gutin, cofounder of Cuba Libre, said the restaurant probably won’t continue signing bonuses if the hiring market changes and there is a bigger pool of applicants. But higher rates of pay and other benefits his business is now offering, such as English and Spanish language lessons and financial counseling, will last.
“We’re doing things that we can to not just make their jobs better, but to make their lives better,” Gutin said.