A bonus can be an excellent way to land a desirable new candidate as well as reward top-performing employees. But is it enough to make them stay? At Paysa, we examined top tech companies, how much they paid in bonuses, and how long employees remained working for each organization.
Do annual bonuses encourage employee loyalty? And do sign-on bonuses help retain workers? Continue reading to find out.
Is an Annual Bonus Enough?
Is an annual bonus enough to make employees stick around? Not necessarily. According to our internal data, Salesforce had the highest reported average annual bonus of $39,959, yet employees only stayed an average of 23 months. And while Microsoft paid an average annual bonus of $23,224, it retained employees for the longest amount of time: an average of 44 months.
The second highest annual bonus came from Facebook ($33,225), which kept employees for an average of roughly 25 months. Hewlett Packard Enterprise had some satisfied employees with an average stay of almost 42 months, but it didn’t appear to be just the annual bonus that made them stay — its average bonus was $10,756.
Signing on the Dotted Line
A signing bonus can be a great tool to recruit attractive candidates in the highly competitive tech space. But do these incentives help with employee retention? Our research indicates that sign-on bonus amounts may be strongly related with how long an employee stays with the company.
Facebook led the pack with an average sign-on bonus of $45,708 and an employee length of roughly 25 months. However, Apple was able to retain employees longer for less, with an average sign-on bonus of $27,201 and 37-month employment retention. On the flip side, Oculus VR had a reported $6,926 average sign-on bonus and an employee stay of around 20 months, and Uber paid an average of $1,807 and retained employees an average of just over 21 months.
So is it all about the money? Not entirely. In addition to making a company more attractive, some candidates feel that a sign-on bonus can build trust with an employer and form a solid foundation for a working relationship.
Bosses of the Bonus
When it comes to employee retention, we’ve established that annual and sign-on bonuses may play a role when examined separately. But what about when we look at those figures side by side?
When examining the top 10 tech companies for retention, Google was the overall leader with an average annual bonus of $32,478 and a sign-on bonus of $27,547. VMware, however, wasn’t far behind with an average annual bonus of $33,145 and an average sign-on bonus of $18,851.
Signing bonuses are becoming more and more commonplace in recruiting technical jobs. This could be a testament to the fact that employers across the board are experiencing challenges with retaining talented employees, so to counteract this issue, some companies are returning to sign-on bonuses.
Location, Location, Location
In real estate, location is everything. The same could be said for tech companies. Silicon Valley is known for housing some of the top tech companies in the world, including Facebook, Google, and Apple. But how do different regions rank when it comes to average annual bonus amounts? It turns out that sunny California is the place to beat when it comes to average annual bonuses. That’s because 11 of the top 15 tech companies with the highest annual bonuses were in Silicon Valley. This list was led by Salesforce and included big players like Facebook, , Dropbox, Google, Uber, and LinkedIn among the top 10.
The Pacific Northwest was also picking up steam when it came to average annual bonuses. Amazon and Microsoft were among the top and are both located in Washington. Meanwhile in the suburbs of Washington D.C., Capital One and CSRA rounded out the top 15.
Making It Worth the Move
Concerning sign-on bonuses, the West Coast is on top again. Facebook (Menlo Park, California), Amazon (Seattle, Washington), and Pinterest (San Francisco, California) led the way with average sign-on bonuses between $33,000 and $46,000.
This makes sense, though, when you consider the average cost of rent for a single person in San Francisco is over $2,077. With these ever-increasing costs, tech companies have to do more to attract talent, and that may include bigger sign-on bonuses.
Paying It Forward
Our research shows that annual and sign-on bonuses may have a significant impact on employee retention. With such a high demand for tech workers, these numbers can be expected to increase as new technologies emerge. The good news? If you’re a job seeker in today’s tech industry, you’re poised to be in a good position for a hefty sign-on bonus, annual bonus, or both. This is because today’s tech companies see the value in not only attracting talent but also retaining it.
At Paysa, you deserve to benefit from your talent. Make the most of your career by comparing companies’ sign-on bonuses and salaries. Don’t sit back and let others dictate how much you should earn. Take control of your career today by equipping yourself with the knowledge to get the best offer. Visit us at Paysa.com to learn more.
Originally published at www.paysa.com on October 17, 2017.
