Vying for the right talent, many firms are luring prospective employees with joining bonuses, which is usually over 10 per cent of their overall cost to company, say HR experts.
After a lull, hiring activities have gained momentum in recent times, especially with companies' envisaging mega expansion plans.
"Companies are offering joining bonus as demand for skilled workforce is high, at times there are crucial positions to be filled for which companies cannot wait to get people on board," executive search firm GlobalHunt India's Director Sunil Goel told PTI.
According to experts, the trend of joining bonuses is more seen in sectors such as BFSI (Banking, Financial Services and Insurance), IT/ITeS, Services, Power, Energy and Infrastructure.
"The main reasons for offering joining bonus is to ensure that the company gets the right talent at the right time... In some cases, it helps compensate for a slightly lower than expected CTC, from a candidate perspective," recruitment firm TeamLease Service's Vice President Surabhi Mathur Gandhi said.
Joining bonuses is estimated to be in the range of 10 to 20 per cent of the employee's Cost To Company (CTC).
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"On an average, firms are doling out between 10-20 per cent of annual CTC to retain senior employees. Maximum and highest joining bonuses are being offered in BFSI sector," Goel said.
Noting that the amount cannot be generalised for all levels, Gandhi said that on an indicative basis, joining bonuses could be about 8 to 10 per cent.
"For instance, at the mid-level in IT sector, the joining bonus could range anywhere between Rs 75,000 to Rs 1.25 lakhs," Gandhi added.
In many cases, joining bonuses are paid by the firm, when an employee loses out on benefits (such as bonuses) while leaving the existing company.
Experts also opined that joining bonuses are not included in an employee's CTC and companies' have different terms and conditions for such bonuses.
Gandhi noted that companies usually dole out joining bonuses as "a one-time payout... Over and above the salary as cash".
Hiring as well as salaries are expected to surge as much as 20 per cent this year.