Shortages of highly skilled professionals within South Africa’s financial services sector mean that more corporates are using joining bonuses — or “happy hellos”, as they are also known — as a way of coaxing the best employees into the fold.
Debbie Goodman-Bhyat, MD of Jack Hammer Executive Headhunters, says joining bonuses are becoming a commonly used tool with bigger corporates when they recruit highly skilled human capital.
“Bonuses may vary in size and are often utilised to reimburse candidates for annual bonuses and share options they may need to forfeit when leaving their current positions.
“The ‘welcome bonus’ incentive may sound like a free ride, but as we all know, there is no such thing,” Goodman-Bhyat 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.”
A few years ago, stock options held little weight as an attraction mechanism, due to the poor performance of the equity market; however, in the current strong bull market of the past few years and booming local economy, share schemes are now acting as the retention tool they were originally intended to be.
“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.
“Employers who intend recruiting mid- to high-level skills certainly 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 current corporate climate,” Goodman-Bhyat concludes.