Golden hello

A Golden hello is

1. a generous welcome package[1] for new employee from a rival firm to entice the employee to leave the competing company.[2] A payment made to induce an employee to take up employment.[3] Unlike a signing bonus, a golden hello is more likely to be extended to executive-level employees than to lower-level employees.[2]

2. a payment from a government to an employer who takes on new staff when jobs are hard to find in a recession.[1]

3. is more like financial incentive[4] for graduates in STEM (science, technology, engineering and maths) subjects into teaching,[5] in the UK.

Risks of offering Golden hello

If the employee worth the money

A hiring company may spend millions of dollars for golden hello package.[2] Hiring company hope the poached executive generates more benefits for them than the cost of bonuses.[2] Following the financial crisis of 2008-2009, such compensation methods have become controversial.[6]

If the payment rate is right

It's difficult to make the payment rate be incentive for employee.[7] Generally, employees who are senior-level receive higher golden hello than entry-level or mid-level employees, considering the skills, experience and talent for specific positions.[7]

Advantages of offering Golden hello

Attracting talented recruitment

In a study by Aerotek and the Human Capital Institute, 46% of professionals(570) at companies said that the best way to attract senior-level employees is bonuses.[8]

[9] Employers can offer a one-time signing bonus or promise a specific timeline for raises to salaries.[9]

Building trust between employee and new hire

Golden Hello build the foundation for a positive relationship between an employer and a new employee.[9] The study “Can a Signing Bonus Motivate Effort?[10]” indicated that trust is built between employers and new hire when employers offer signing bonuses. This is also incentive for new employers to work harder.[10]

Golden Hello for academies

In the UK, a golden hello is financial incentive,[11] not for executives, but for attracting graduates in STEM[5] (science, technology, engineering and maths) into teaching in an maintained secondary school.[12]

The scholarships, funded by Department of Education, were introduced in 2011 and are offering £30,000[13] for graduates with a good degree in physics, chemistry, computing or maths in 2016/17.

According to the document of National College for Teaching and Leadership, golden hello is only available to teachers "who trained through a postgraduate initial teacher training (ITT) course leading to qualified teacher status (QTS)".[12][14] Teachers must meet the training, teaching and application criteria, in oder to be eligible for golden hello payment.[12]

Golden Hello for High-ranking executives

In the United States, golden hellos are typically offered to high-ranking executives by major corporations and may be valued in the millions of dollars.[15] They are said to have become "larger and more common" starting around the mid 1990s.[16][17] Apple Company paid Angela Ahrendts, Ex-Burberry boss, $68million (approximately£40million) when she joined in 2014,[18] which is the biggest golden hello in business history.[18]

Additional Reading

References

  1. 1 2 "Golden Hello - Definition of Golden Hello - QFINANCE". www.financepractitioner.com. Retrieved 2015-11-04.
  2. 1 2 3 4 "Golden Hello Definition | Investopedia". Investopedia. Retrieved 2015-11-04.
  3. ↑ A Dictionary of Accounting. ISBN 9780199563050.
  4. ↑ "Golden Hello eligibility criteria and guidance for academies" (PDF).
  5. 1 2 "Scholarships Get People Into Teaching But Can't Make Them Stay". Forbes. Retrieved 2015-11-04.
  6. ↑ "Golden Hello - Investing Dictionary". byforex.com. Retrieved 2015-11-04.
  7. 1 2 "4 Reasons Signing Bonuses Are Worth the Money". Entrepreneur. Retrieved 2015-11-04.
  8. ↑ "Recruiting Top Talent Survey" (PDF).
  9. 1 2 3 "4 Reasons Signing Bonuses Are Worth the Money". Entrepreneur. Retrieved 2015-11-05.
  10. 1 2 Choi, Willie (2013-10-24). "Can Offering a Signing Bonus Motivate Effort? Experimental Evidence of the Moderating Effects of Labor Market Competition". Rochester, NY.
  11. ↑ Evaluation of the Golden Hello Initiative. ISBN 1 84478 246 8.
  12. 1 2 3 "Golden Hello eligibility criteria and guidance for academies (including free schools)" (PDF).
  13. ↑ "Bursaries and funding | DfE Get Into Teaching". getintoteaching.education.gov.uk. Retrieved 2015-11-05.
  14. ↑ "Scholarships Get People Into Teaching But Can't Make Them Stay". Forbes. Retrieved 2015-11-05.
  15. ↑ Definition of 'Golden Hello'
  16. ↑ Pay Without Performance. ISBN 9780674022287.
  17. ↑ "Pay Without Performance" (PDF).
  18. 1 2 "Revealed: Ex-Burberry boss Angela Ahrendts handed a $68million 'golden hello' after joining Apple".

External links

  1. ↑ "Pay Awards | Investors shooting themselves in foot with acceptance of "golden hellos" - QFINANCE". www.financepractitioner.com. Retrieved 2015-11-04.
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