The unexpected stability of sign-on bonuses in 2024

In an era where headlines scream of tech layoffs and economic uncertainty, a surprising trend emerges: the resilient sign-on bonus.

The Wall Street Journal's recent article, “The Jobs Where You Can Still Land a Signing Bonus,” highlights this comp phenomenon.

According to reporters Lynn Cook and Ray A. Smith, nearly 4% of jobs posted on Indeed.com in July advertised sign-on bonuses. While this marks a decline from last year, it remains more than double the 1.7% rate in July 2019. Interestingly, even though the prevalence of sign-on bonuses has decreased, their dollar value has remained steady, underscoring their continued significance in certain sectors.

Although these findings highlight the shifting landscape of job offers, our market data research provides a more nuanced perspective. Let’s explore the new trajectory of best practices for sign-on bonuses and what the new mandate is for comp teams.

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How sign-on bonuses changed in 2022

In my analysis of sign-on bonus practices, I uncovered some differences in market trends compared to the data in the Journal’s report. Here’s what I found:

Among top tech companies, the median sign-on bonus across all job families decreased during the second half of 2023. However, since bottoming out in Q4 of 2023, median sign-on bonuses increased in 2024 – up 33% versus Q4 2023 – with product and G&A roles experiencing the highest growth rates.

While the prevalence of sign-on bonuses surged throughout 2022 and peaked in Q4 of that year, it has steadily declined across most job families ever since. In the last quarter, about one-third of offers included a sign-on bonus. Notably, despite the overall drop, bonuses in sales roles bucked the trend, rising from 16% in Q4 2023 to 26% in the most recent quarter.

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How TA and comp teams think differently about sign-on bonuses

TA departments typically echo Lynn Cook and Ray A. Smith’s sentiments, emphasizing the importance of sign-on bonuses to land capable, qualified candidates. Compensation teams, however, reached a different conclusion: while the frequency of sign-on bonuses should decrease, the values may need to increase to remain competitive and secure top talent.

Sign-on bonuses are a pressing issue in today's labor market, gaining so much attention that the topic is on the front page of America’s leading newspaper.

The mandate for compensation teams is clear: Design and continuously refine a flexible sign-on bonus policy to attract top talent. This requires careful consideration of key design decisions such as frequency, amount (by job level and family), and willingness to negotiate.

Compa’s platform can provide best-in-class market benchmarks that are crucial to program design – let me show you. At no cost, I’ll work with your team on your sign-on bonus strategy. Find a time that works for you here.

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Your peer,
‍Jonathan Jebson
‍Comp Insights Director @ Compa