Golden hello

In accounting and contractual law, "golden hello" is a term used for several different arrangements:

  1. A payment made to induce an employee to take up employment from a specific employer[1] in form of a welcome package[2] or a payment from a rival employer to entice the employee to leave the other company.[3]
  2. A payment from a government to employer (private company) during an economic recession who takes on new staff, usually superfluously, when job openings in general are scarce.[2]
  3. In the United Kingdom, a financial incentive[4] for graduates in science, technology, engineering, and mathematics (STEM) who are pursuing a career in teaching.[5]

Risks and advantages

If the employee is worth the money

A hiring company may spend millions of dollars for a golden hello package,[3] hoping the poached executive generates more benefits for them than the cost of bonuses.[3] 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 an incentive for employees.[7] Generally, employees who are senior-level receive higher golden hellos than entry-level or mid-level employees, considering the skills, experience and talent for specific positions.[7]

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 indicated that trust is built between employers and new hire when employers offer signing bonuses.[10] 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 a 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 order 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]

Further reading

References

  1. ^ Law, Jonathan (29 April 2010). A Dictionary of Accounting. ISBN 9780199563050.
  2. ^ a b "Golden Hello - Definition of Golden Hello - QFINANCE". www.financepractitioner.com. Retrieved 2015-11-04.[permanent dead link‍]
  3. ^ a b c "Golden Hello Definition | Investopedia". Investopedia. Retrieved 2015-11-04.
  4. ^ "Golden Hello eligibility criteria and guidance for academies" (PDF).
  5. ^ a b "Scholarships Get People Into Teaching But Can't Make Them Stay". Forbes. Retrieved 2015-11-04.
  6. ^ "Golden Hello - Investing Dictionary". byforex.com. Archived from the original on 2016-06-25. Retrieved 2015-11-04.
  7. ^ a b "4 Reasons Signing Bonuses Are Worth the Money". Entrepreneur. 3 February 2015. Retrieved 2015-11-04.
  8. ^ "Recruiting Top Talent Survey" (PDF). Archived from the original (PDF) on 2016-03-04. Retrieved 2015-11-05.
  9. ^ a b c "4 Reasons Signing Bonuses Are Worth the Money". Entrepreneur. 3 February 2015. Retrieved 2015-11-05.
  10. ^ a b Choi, Willie (2013-10-24). "Can Offering a Signing Bonus Motivate Effort? Experimental Evidence of the Moderating Effects of Labor Market Competition". SSRN 1910237.
  11. ^ Hopwood, Vicky (2004). Evaluation of the Golden Hello Initiative. ISBN 1-84478-246-8.
  12. ^ a b c "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. ^ Bebchuk, Lucian A.; Fried, Jesse M. (2006). Pay Without Performance. ISBN 9780674022287.
  17. ^ "Pay Without Performance" (PDF).