Most people will have heard of a ‘golden handshake’, a payment made to an employee when they leave a company, usually due to redundancy or after a long period of service.
A ‘golden hello’ is a payment made to an incoming, rather than outgoing, employee.
If you have never come across this term before or want to know more, read on.
What Is a Golden Hello?
In simple terms, a golden hello is a payment that workers receive when beginning their employment at a company.
A standard golden hello payment can be anything from £1,000 to £10,000. Think of it as a bonus.
The golden hello is meant to act as an incentive to attract the very best candidates, and can help with any relocation costs.
Usually, this payment is conditional – you may even have to repay it under certain circumstances. The most common reason for being asked to replay your golden hello is leaving employment within a specified time period (this is normally six months in most cases).
Once you have joined the business, the cash can be paid either as a lump sum instantly, a lump sum once you have worked there for a set period, or instalments over an agreed period.
What Sorts of Industries Offer Them?
The NHS frequently uses a golden hello incentive. In the past, for example, GPs have been offered payments of up to £20,000 if they chose to work in rural practices.
In certain subject areas where there is a shortage of teachers, golden hello payments are used to attract candidates. STEM is a case in point – payments of up to £30,000 have been offered to graduates with a degree in a STEM subject, to tempt them to train as secondary school teachers.
Of course, the business world makes use of these kinds of bonuses for new staff as well. This is often seen in executive positions, where top industry talent is offered large sums to join certain companies.
Why Do Employers Offer Them?
In theory, employers offer golden hellos for the value they get back in return. They are used to attract the best talent to that business.
Modern workers have gone beyond merely looking for a steady job with a decent wage. They often demand something more from their employers. A golden hello package is something that employers can offer to meet this need.
Offering this kind of package also helps employers to tempt the most talented workers away from their competitors.
Offering a sign-up bonus to new staff can also help to build respect and loyalty. Businesses invest heavily in the training and development of staff members, and it could be detrimental to see such valuable experience walk out of the door for another position.
Are There Any Drawbacks to Golden Hellos?
The most obvious one is the initial cost to the business. The initial outlay of hiring can impact your bottom line in the short-term.
Golden hellos might also attract people who are only interested in the money and not actually engaged with working for that company. Ideally, any such candidates need to be filtered out at interview.
Are They Taxable in the UK?
A golden hello payment is treated as employee income. So it is subject to tax, along with National Insurance contributions under the PAYE scheme your employer operates. You will be taxed on receipt of the bonus.
What Should You Consider Before Accepting One?
While being offered this sort of package from an employer is exciting, do not accept it right away.
As with most things in life, it is best to think carefully first:
- One thing to consider is the amount on offer – if you are having to relocate, for example, will it cover all your costs? If not, you will need to renegotiate a better offer.
- Another prime concern is how the money will be paid. Is it one lump sum up-front or staggered over the next 12 months? Your circumstances may mean that one method is preferable to another in this regard. Make sure that how the money will be paid works for you.
- Lastly, you should read through all the attached conditions and consider them carefully. While some standard ones are to be expected, watch out for anything you think is unfair. If, for example, there is a condition that you would have to repay it in full if you ever left the company, this would be of concern.
For many people entering the job market, a golden hello payment is welcome. This can be especially true for graduates – who may use it to pay off student loans – as well as more experienced workers, who may need it for bills until their first pay packet arrives.
The great news is that more and more businesses are using them to find and keep the staff they need.
Now you know more about them, you are perfectly placed to consider any that come your way.