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The Proper Use of $ign-On Bonus

In our business, we seem to have some strange phenomena that simply do not make sense. Like:

“High Performance SUV” – Stuffing some gigantic GASOLINE engine in a 5,000 to 6,000 pound mini school bus just so you can speed from light to light never made sense to me. I thought SUVs were for mass-transit not rapid-transit.

“Porsche 911 Hybrid” – Coming to the U.S. soon, placating the “Greenies” who want to impress their fellow members at the yacht club that they got 50 miles to the gallon screaming their way down the interstate.

“Equipped with LEATHER drink holders” – Believe it or not, the new Aston Martin Rapide now sports the finest cowhide for that special driving beverage.

“$$ign-On bonuses ARE necessary in this broken economy even though we have 10 plus% unemployment” – What???

Yes, as confusing as the chaos of BP’s Gulf oil clean-up, sign-on bonuses are becoming mandatory to capture the right person … or ANY person willing to work. Especially for Technicians. Here is why ….. Since the financial meltdown (brought to you by Fanny, Freddie, AIG, and others) Americans have been told that all this turmoil is not their fault. The politicians lead Americans to believe they are just victims of greedy corporate elites or corrupt politicians. Can’t pay your mortgage? Not your fault; the government wants you to believe it is going to reduce your payment. Credit card balance just keeps going higher? Not your responsibility! That is why the new Financial Reform bill was passed to stop those Buckin’ Billy Bronco Bankers from overcharging interest and fees you should not have had to pay. Lost your job because the economy took a dive? No way that is your fault Joe the Worker. Let’s extend that unemployment until things get better.

See a pattern here? And it went right to most Americans’ heads just like a strong dry martini on an empty stomach.

So that’s why at least a couple of times a week I get a call from employers telling me that they have contacted multiple “job seekers” and people who have actually sent an application, and when the employer called them, they get no response back.

Quite frankly, in my 38 years of experience of being in and managing the workforce, I have never seen a more fickle, aggravating workforce than now.

And Technicians are the worst because they can collect unemployment as well as fix cars at home for side money. Some Techs make as much this way as they do employed by your shop when you consider they pay no taxes.

And don’t forget that America now has the largest percentage of a two-member working household in its history. So Papa Wrench in many cases is not the only source to pay for essentials of the family.

Why a $$ign-On? To entice the employed auto pros who are not currently happy with the pay, their hours, workdays, etc. And yes, $$ign-ons also are going to bring some of the wrenches out of their driveways and back to your shop.

So what are the guidelines for $$ign-ons? I speak from years of experience myself recruiting Techs, and guiding my over 6,000 auto/truck/tire/collision clients across this great nation:

Steps:
  1. Establish what your top amount would be. To do this, imagine if the absolute perfect candidate contacted you and he/she would fit your organization perfectly. What is the most you would pay: $500, $1,000, $5,000?
  2. For this example, let’s say it is $2,500. Use this amount in your recruiting ads or to your tool guy and parts supplier by saying “Up to $2,500 $$ign-on” The key is “up to”.
  3. When contacted by a candidate and they ask about the $$ign-on, insist on a resume as well as past EMPLOYERS’ (not references) names and phone numbers to call, excluding calling their present employer if they have not disclosed to them. If they buckle under that request, the job seeker is most likely not a good candidate.
  4. If the past employers don’t say anything that puts you on alarm, call the job seeker/candidate. Yes, I know that many past employers won’t give out any information except dates of employment, however, you can usually get some kind of idea. More on this in a later article.
  5. Now set in your mind what the top amount that THIS candidate would be worth. Remember, the “up to” amount is for the perfect candidate, not necessarily this one.
  6. Have the job seeker come in for a face-to-face interview or if not possible, set up a phone interview. When you feel that the person would be a good fit, present the $$ign-on in the following manner: “We have UP TO X on the $$ign-on, however, the top amount that is listed is for the perfect fit person. We are genuinely interested in you but some of your shortfalls are x, x, and x. We are still interested in you coming aboard with us. We were thinking you would be worth (in this example we are going to use $1,000 but always less than the amount you came up with in #5) $1,000 $$ign-on.” Then negotiate until you agree on a figure.
  7. Let’s say that he agreed to $1,000. Now present how it will be paid in the following way: “Ok, so here is how the $1,000 will be paid out. Your first week will always be the hardest because you will need to see the flow of the shop, parts flow, figure out where all the equipment is, etc. So after your first week, whatever hours you turn in (or if not on flat-rate, whatever his salary is) I am going to add $200 to it. Now 30 days after that if you are happy and we are happy with your performance, I will pay you another $200 towards your $$ign-on. And after another 30 days, same thing until it is paid off.”


The time and amounts of payout can be different. The above sample was just using “Up To $2,500”, negotiated to $1,000, and paid over 4 months. But you can use a different plan.

In the mean time, may your business continue to GROW, and always be recruiting! – Joe Henry

*Son of a former Mercedes and Studebaker dealer as well as an independent shop owner and fixed ops dealership manager, Joe Henry has had many successful years in the automotive, truck, tire and collision industries before founding ACT Auto/Truck/Tire Staffing in 1998. He can be reached at 1-800-489-0536 or visit www.ACTautostaffing.com
Joe Henry - Owner
ACT Auto/Truck/Tire/Collision Staffing


Links to other great articles: Why You Should be ALWAYS be Recruting | If you think the workforce is unstable.. | When, why, & how to use a "Blind Ad"