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Contractors Turn to Signing Bonuses to Attract Skilled Labour


Over the past few years, mechanical contractors of all types have been acutely aware about shortages of skilled field staff. Older experienced technicians are retiring, and despite seemingly unlimited demand for service trade jobs, the supply of replacements is lower than the decline in numbers.


It is hard to know the exact reason for this. There are a few contributing factors including:

  • The reduction of high school shop classes

  • School counselors recommending university or college degrees to high school students instead of skilled trades

  • Shortage of community college or vocational school programs

The situation had become so dire that many companies have turned to signing bonuses as a recruitment tool to attract skilled labour.


Bonuses can range from $500-$5,000 depending on geographical market as well as experience and skill level of the target recruit. Bonuses are paid between 3 to 12 months after the start date and they can also include perks such as cell phone cost reimbursements or upgraded company vehicles.


Bonuses seem to be most effective when hiring staff directly from trade schools, due to the larger pool of entry-level people who are seeking a job where they can get the training they need to start their careers. Prospective graduates share information readily therefore signing bonuses are becoming standardized across North America and contractors are now including them in their HR plans.


Signing bonuses can cause issues with current employees but one way to mitigate that is to establish referral bonuses as people established in the trades usually have good networks themselves. Referrals also reduce hiring risk, as staff will generally refer workers who will reflect well upon themselves.


While signing bonuses can be a good start to addressing labour shortages, contractors also need to maintain a quality workplace to retain the staff. The competition for staff is unrelenting and if a field worker has a less than ideal experience with their managers or coworkers, the signing bonus likely won’t help with flight risk.


On The Flip Side

If a contractor works hard to become known as the “preferred employer” in his or her local area, that will help with reducing the need for signing bonuses as the benefits of working for a company with a good reputation will help attract and retain employees. Many contractors are placing extra emphasis on social media to provide a running narrative of the company culture and all it has to offer.


Another aspect to ensuring employees stay after signing on is working and managing staff based on key performance indicators. Staff appreciate constructive feedback as long as it is delivered with the intent on furthering their careers leading to increased compensation.


Contractors that take the time to build their culture, make their employees feel respected and important, and go the extra mile will become the employers of choice….and will get their employees of choice. Those contractors will be the ones who will best be able to meet the needs of the insatiable demand for contractor services.


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