The summer of 2021 was a great time to land a new job in the United States, as many new hires received unprecedented incentives such as wage increases and signing bonuses during this period — but that may all change in the coming months.
In a new report from Salary.com, the Waltham, Mass.-based compensation management company found that the tumultuous labor market of the past few months may look very different by the end of the year.
For instance, survey respondents shared that although 50% of employers are currently offering signing bonuses to new hires, only about 20% plan on keeping this practice by the end of 2021.
Instead, more than 6 in 10 organizations plan on implementing base salary increases for both hourly and salaried employees. Another 67% have indicated that their starting base salary offers are above their market reference point.
Employers to phase out signing and retention bonuses by the end of 2021
The U.S. job market saw a shortage of talent across industries in the wake of the COVID-19 pandemic, with 82% of respondents agreeing to this statement. As a result, many companies turned to signing and retention bonuses in order to attract and keep much-needed talent.
The Salary.com survey revealed that these incentives continue to be used by employers today, including:
- Median signing bonus for hourly employees: $1,000
- Median signing bonus for salaried employees: $5,000
- Median retention bonus for hourly employees: $1,000 after 6 months
- Median retention bonus for salaried employees: $7,500 after 12 months
Unfortunately for current job seekers with an interest in these perks, survey results show that these bonuses will be phased out by most employers by the end of the year. Salary.com found that less than 20% of companies will offer signing bonuses in the next six months, while a mere 13% will do the same for retention bonuses.
New hire base pay rates expected to increase for hourly and salaried workers
A previous survey from Jobcase revealed that, at 41%, pay was the most important consideration for pandemic-era job seekers looking for employment. However, another one from FlexJobs showed that almost half of today's job seekers agree that the job opportunities they're seeing now offer too little in terms of compensation.
So, it comes as little surprise that more than 6 in 10 respondents report that their organizations are likely or very likely to increase base salary rates for hourly employees (65%) and salaried employees (62%) in the next six months.
Of course, base salary increases and bonuses aren't the only strategies employers plan on using to bring in new talent — a recent ResumeBuilder.com survey showed that nearly a quarter of businesses will offer additional benefits such as flexible work schedules, retirement plans and life insurance policies to new hires.
Methodology: For this report, Salary.com gathered data from 405 organizations in the U.S. and Canada between June 9 and July 15, 2021. Nearly 50% of respondents work for companies with up to 5,000 employees, while almost 24% represent companies with 5,000 to 10,000 employees.