Golden hello explained

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. 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.

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)".[14] Teachers must meet the training, teaching and application criteria, in order to be eligible for golden hello payment.

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

External links

Notes and References

  1. Book: A Dictionary of Accounting. 9780199563050. Law. Jonathan. 29 April 2010.
  2. Web site: Golden Hello - Definition of Golden Hello - QFINANCE. www.financepractitioner.com. 2015-11-04.
  3. Web site: Golden Hello Definition Investopedia. Investopedia. 2015-11-04.
  4. Web site: Golden Hello eligibility criteria and guidance for academies.
  5. Web site: Scholarships Get People Into Teaching But Can't Make Them Stay. Forbes. 2015-11-04.
  6. Web site: Golden Hello - Investing Dictionary. byforex.com. 2015-11-04. 2016-06-25. https://web.archive.org/web/20160625110755/https://www.byforex.com/wiki/golden-hello. dead.
  7. Web site: 4 Reasons Signing Bonuses Are Worth the Money. Entrepreneur. 3 February 2015 . 2015-11-04.
  8. Web site: Recruiting Top Talent Survey. 2015-11-05. 2016-03-04. https://web.archive.org/web/20160304125611/http://www.aerotek.com/downloads/Aerotek_RecruitingTopTalentReport%202014.pdf. dead.
  9. Web site: 4 Reasons Signing Bonuses Are Worth the Money. Entrepreneur. 3 February 2015 . 2015-11-05.
  10. Can Offering a Signing Bonus Motivate Effort? Experimental Evidence of the Moderating Effects of Labor Market Competition . Choi . Willie . 2013-10-24 . 1910237.
  11. Book: Evaluation of the Golden Hello Initiative. 1-84478-246-8. Hopwood. Vicky. 2004.
  12. Web site: Golden Hello eligibility criteria and guidance for academies (including free schools).
  13. Web site: Bursaries and funding DfE Get Into Teaching. getintoteaching.education.gov.uk. 2015-11-05.
  14. Web site: Scholarships Get People Into Teaching But Can't Make Them Stay. Forbes. 2015-11-05.
  15. http://www.investopedia.com/terms/g/goldenhello.asp#axzz1xb2oougP Definition of 'Golden Hello'
  16. Book: Pay Without Performance. 9780674022287. registration. Bebchuk. Lucian A.. Fried. Jesse M.. 2006.
  17. Web site: Pay Without Performance.

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