29 May 2007
Johannesburg — A NEW phrase is doing the rounds in the recruitment industry -- the happy hello.
The phrase has been coined for the joining bonuses that companies are offering to coax the best employees into their fold. Such incentives are particularly prevalent in SA's financial-services sector, which is being hit badly by a shortage of highly skilled professionals.
The bonuses are often used to reimburse candidates who are sacrificing the annual bonus and share options they would receive if they remained with their current employer, says Debbie Goodman- Bhyat, MD of Jack Hammer Executive Headhunters.
"The welcome bonus incentive may sound like a free ride, but as we all know, there is no such thing," she says. "These joining bonuses usually have retention clauses attached, and employees are likely to be required to pay back all or some of the money should they leave within a specified time frame."
The joining bonuses have become more common because stock options are gaining in popularity, tying staff into staying with their original employer. Stock options were out of favour a few years ago because of the poor performance of the equity market, but the current strong bull market and booming local economy means share schemes are now acting as an attractive retention tool again, she says.
"Vesting periods generally stand at between three and five years, but even employees whose shares have not yet vested, recognise the value that they will realise from maturing share options at some point in the future, and are likely to stay put, unless similarly rewarding compensation is on offer at a new company," Goodman-Bhyat says.
"Employers who intend recruiting mid- to high-level skills need to be able to proactively tackle the share-option question when hiring, and be willing and able to outdo elaborate retention schemes, which are becoming increasingly competitive in our corporate climate."
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