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

• Golden boot compensation
• Golden handcuffs
• Golden handshake
• Golden parachute
• Voluntary redundancy
• Signing bonus

References

External links

• Golden Hello Investopedia
• Investors shooting themselves in foot with acceptance of "golden hellos" Archived 2016-03-04 at the Wayback Machine
• Golden Hello eligibility criteria and guidance for academies( National College for teaching&leadership)
• Can offering a signing bonus motivate effort?^{[permanent dead link]}
• Scholarship Fundings from Department of Education
• Pay without Performance
• Four Reasons Signing Bonuses are Worth the Money

This page was last edited on 29 March 2024, at 22:03