Top 3 incentives for new hires right now & the impact on Payroll

As companies try to recover from the effects of the pandemic, many want to bring on new hires – but that’s easier said than done.

Over half of companies plan to add new workers in the second half of 2021, according to a recent survey from Robert Half.

But how will they get new hires in the door? The answer for some employers is hiring incentives. If you’re also going that route, it’s key to keep in mind what that means for your Payroll team.

What Payroll should watch for

To draw in top talent, companies are relying on three key incentives that could potentially impact Payroll’s responsibilities when it comes to paying employees correctly:

1. Signing bonuses. Per the survey, 48% of companies plan to offer bonuses to new hires in the second half of 2021. It’ll be important for Payroll to know whether these bonuses are discretionary or nondiscretionary, based on the language written in employee contracts. Signing bonuses would typically be considered nondiscretionary and included in the regular rate of pay since employees expect to receive them after the criteria have been met. But this may not always be the case, so it’s crucial to double-check.
2. More paid time off. No matter how hard you try, you may not be able to increase the salary budgeted for a position. However, you may have more leeway with offering new hires more time off – a strategy 43% of those surveyed plan to use this year. New hires may need a nudge to use this time off, especially if they’re working hard to make a good impression. It may also be necessary to remind them that they shouldn’t do any work while on vacation – including checking email, as these hours, if unaccounted for, can impact their pay if they’re nonexempt.
3. Better job titles. Forty percent of employers are offering new hires fancier job titles to entice them to sign on. While this is all well and good, calling someone a “manager” doesn’t mean they’re automatically exempt from overtime. Be sure to have Payroll review the job description and look at the actual job duties to see if the person’s classified correctly and receiving the right type of pay. And have Payroll check-in with supervisors to make sure this info is accurate.