The impact of bonus season on your hiring process
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Just last week, I had a conversation with a potential candidate who seemed a slam dunk for a Senior Vice President of Corporate Strategy role we are working on here at Charles Aris.
He said that this is the exact type of position he would want when he leaves consulting. He had the requisite education, the experience, the industry focus – he was even local to our client and would not need to relocate. Though the role appeared to be the perfect fit for him, and he for it, he did not want to move forward in the hiring process.
He cited timing as the reason. As it turned out, the main driver of this timing dilemma was a big bonus that he would receive at the end of the year if he opted to stay with his current organization.
As we enter the year’s fourth quarter, this is something we will hear more and more often because bonus season is around the corner for many of the top consulting firms. Bonuses are often paid in December or January, and you must still be employed by the organization on the payout date to receive the bonus.
This dynamic can create challenges for organizations seeking strategy talent. Consultants who are beginning to think about next steps in their careers often are hesitant to leave a large amount of cash on the table before transitioning. They’ve worked so hard for it, after all.
Thankfully, there are a few potential solutions we’ve seen clients use successfully to combat this:
- Provide a cash sign-on bonus to help offset what a candidate is leaving behind. If that isn’t in the budget, consider a sign-on bonus that is broken into multiple parts – for example, a portion paid now with the remainder in six or 12 months.
- Provide a sign-on equity package. While it’s not cash in the candidate’s pocket now, some of our clients have found it easier to stomach an equity grant rather than a cash payout.
- Delay the start date until the bonus has been paid out, enabling the candidate to collect her bonus before resigning to join your organization.
These are a just a few ideas on how to tackle the challenges associated with bonus season; don’t be afraid to get creative. Bonus season does create additional hurdles, but it shouldn’t be a showstopper when trying to land top talent. When a candidate really wants a role and an organization really wants that candidate, there’s usually a solution that can work for both sides.