Sign-on bonuses are a relative real-time indicator of labor market dynamics, adjusting far more frequently than salary ranges, which are often revised once or twice a year.
For example, a compensation leader may have to say: “Hello, CTO. Can’t hire that vital AI Engineer? Sorry, but we can’t create a new salary range until the next comp review cycle. In the meantime, why don’t you try a sign-on bonus as a way to bridge the gap between their expectations and the highest salary we can offer them?”
It can be a slippery slope in terms of cultural or financial debt, but sign-on bonuses often help to grease the wheels in getting a candidate to sign the dotted line.
This practice is gaining traction, especially in the aforementioned AI/ML category. Let’s take a look at some benchmarks in sign-on bonus frequency broken down by job function.
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Sign-on Bonuses for ML & AI Engineers
The findings from 140,000+ accepted offer letter data points from the trailing 18 months across 3,000+ customers show a clear trend. Among this group of individual contributors (P1 to P6) and manager-level (M3 to M6) employees, tech roles—especially ML/AI Engineering—have the highest frequency of sign-on bonuses.
25% of employees in the ML/AI job family received a sign-on bonus. That’s a frequency of 2.5x more than other candidates.
How does your company leverage sign-on bonuses to stay competitive while also keeping in mind the potential for a slippery slope of cultural or financial debt accrual?
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Matt Schulman is CEO and founder of Pave, the complete platform for Total Rewards professionals. Prior to Pave, he was a software engineer at Facebook focusing on user-centric mobile experiences. A self-proclaimed "comp nerd," Matt is known for sharing data-driven thought leadership around all things compensation and personal finance.
