- The number of job listings with incentives on Indeed has more than doubled since July 2020.
- They include signing payments and retention bonuses, according to the major jobs site.
- Searches for job openings with such incentives have surged 134% year-to-date, Indeed said.
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Businesses are battling to attract workers as the economy roars back to life. Their latest weapon: a slew of hiring incentives.
The share of job openings touting incentives – ranging from signing bonuses to retention payouts – has doubled since July 2020, according to employment service Indeed. The share began to steadily climb through the spring, the same time hiring unexpectedly slowed and narratives of a labor shortage emerged.
The bonuses are a win-win in the current labor market, AnnElizabeth Konkel, an economist at the Indeed Hiring Lab, wrote in a Thursday blog post. Job searches for hiring incentives have leaped 134% since the start of 2021, reflecting the broad desire for more attractive openings.
The incentives are also appealing to businesses. Instead of offering permanently higher wages or paid time off, employers can boost hiring with one-time bonuses, Konkel said.
The use of hiring incentives grew the most in the driving sector, where 16% of openings now mention bonuses, according to Indeed. That’s up from 11.4% at the start of the year. The childcare and personal care sectors also saw strong increases in incentive use.
To be sure, the vast majority of job posts still lack any mention of hiring incentives. Only 4.1% of Indeed postings listed such bonuses. Still, that’s up from the 1.8% share seen in July 2020, and much of the increase took place over the last few months.
The combination of rising incentive use and searches for such bonuses suggests workers “are holding out for better deals rather than taking the first opportunity that comes along,” Konkel said. Businesses falling behind in the rehiring race may need to “consider offering candidates something upfront,” she added.
Whether the increase in incentive use translates to an uptick in hiring remains to be seen. Payroll growth rebounded in May but still came in below estimates. Job openings totaled a record 9.3 million at the end of April, but quits also hit a record high.
A handful of outside factors are likely holding Americans back from rejoining the workforce, Federal Reserve Chair Jerome Powell said in a Tuesday hearing. Fears of COVID-19 and childcare costs could be keeping people at home. Expanded unemployment benefits could also pose a slight disincentive effect, Powell said.
Part of the hiring slowdown could simply be attributed to skills gaps in the workforce, he added. Millions of jobs are expected to be permanently erased from the economy, forcing jobless Americans to find new openings. There “might be something of a speed limit” on how quickly people can find new jobs or adopt completely new skillsets, Powell told a House subcommittee.