Joining bonus is not just for CXOs and senior managers. Blue-chip companies are increasingly handing out joining bonuses to campus recruits as the war for good talent gets hotter, say people directly involved in designing compensation packages.
Companies, including Philips India, Procter & Gamble (P&G), ITC, Mahindra & Mahindra and Hindustan Unilever are offering between ` . 5 lakh as joining bonus .1 lakh and to freshers while also maintaining internal pay parity.
“There is a rising case of joining bonus being doled out by companies in market where there is a war for talent,“ said D Rajiv Krishnan, partner (advisory services and leaderpeople & organisation) at EY India.
“The extra lump sum cash in hand helps young talent take care of their education loans. At the same time, it helps companies maintain their internal pay parity,“ he said.
Joining bonus also helps companies to be competitive on campus and match up with the market leaders who keep revising their salaries. “It helps established companies match up to the market leaders who keep revising their pay offer on campus,“ Krishnan said.
HUL is among the earliest companies offering students joining bonus. Companies consider the extra cash in hand a big at traction for youngsters.
There may be a desire to buy those ultra-cool head phones, top of line smart phone, gift for parents, boy friend, girlfriend, etc. At times, this money could be e basics for a home such as a used to buy the basics for a home such as a bed, or a washing machine.
“We give joining bonus for several reasons. And surprisingly, not all reasons are linked to remuneration,“ said Krish Shankar, HR head for Philips India & subcontinent. “On the softer side, we are aware that for most campus recruits, this is their first real job. From a remuneration perspective, this amount could be given in lieu of an incentive programme that management trainees may not be eligible for during their training period,“ he said.
Mahindra & Mahindra gives joining bonus only to the management graduates that they hire in general management category from top business schools. They are given ` . 1 lakh on joining and `. 2 lakh at the end of two years, subject to performance and meeting other relevant criteria.
“This trend has crept in the top B-schools so as to help young hires manage their initial costs related to loans (as majority of them take loans to fund their education) and other essential needs,“ said Prince Augustin, executive vice-president, group human capital & leadership development, M&M.“This is just a partial support that is given by corporates and, at times, is also seen as a salary bridge,“ he said.
A P&G spokesperson said, “Based on the assessment of internship (of summer interns) we offer pre-placement offers which also includes a joining bonus that can enable them to fulfill personal obligations like school fees.“
Source:- The Economic Times ( Mumbai)