Recruitment in Day Nurseries and Golden Hellos

With recruitment and retention remaining a challenge within Early Years we have had several queries relating to “golden hellos”. What are these and do they work?

Simply put, they are a signing on bonus used to entice in-demand workers to take up employment within your business sometimes from a competitor.

This bonus is usually in the form of a significant single cash payment that the employee will receive when they have joined your business.

Whilst nothing new as a talent strategy that we see it in the Early Years sector is a sign of a recruitment crisis and reflects how far some businesses are willing to go attract staff.

It is a short-term solution for a long-term problem, and employers must proceed with caution when using this type of incentive. The benefits are:

• It can help to attract talent
• Give you a competitive edge
• It provides an immediate financial reward to a new employee on top of their normal pay
• If structured correctly, they can encourage the employee into staying with you for a certain period of time; and
• It can help fill critical roles quickly.

However, it must be remembered that there are other considerations when using this device.

• They are taxable and subject to national insurance. Depending on the amount an employee may face significant deductions and may find the actual figure less desirable.
• Employers may have to offer significant sums to attract the right person and is this sustainable.
• Employers will prudently attract strings to the bonus about how long an employee might have to remain in post or about repaying the bonus if they leave early. This might be seen as a dis-incentive for a candidate especially if another employer has better “perceived terms.”
• Employers may become involved in a “bidding war” and the potential for a candidate to exploit the situation.
• Those with the “deepest pockets” may exploit this situation to attract all the best talent.
• Ethically speaking is it fair and what does it do to address the skills shortages in EY and help you build a team who will be skilled, consistent and be employed by you for several years.

In summary you might want to approach the use of a golden hello with caution but consider it based on its merits. Can you structure it in such a way that it incentivises the new starter to make ground quickly in the new role? Could the benefit outweigh the outlay. To do this you need to thoroughly understand your numbers. What is your profit per person for example?

If you’re not a Redwing retained client, and you would like some further support with recruitment, you can find our Recruitment Policy on our shop.