By Getting your first job as a doctor is a major moment in your life. You might be so excited that all you’re thinking about is signing on the dotted line. But it’s important to sit down; review the offer carefully; and, most of all, negotiate the terms of the offer. One thing that you can ask for or negotiate is a physician signing bonus. These give you some extra money upfront that can be key for handling some of the costs you’re likely to encounter early in your career.
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What Is a Physician Signing Bonus?
A physician signing bonus is a financial bonus that you receive when you sign your employment contract. For example, you might get a job offer that pays $200,000 a year and comes with a $15,000 signing bonus.
You’ll get that $200,000 salary in your regular paychecks once you start work. That $15,000 bonus is a separate, one-time payment. It might be given to you as soon as you sign the contract or as part of your first paycheck. Either way, it’s some extra cash put in your pocket.
Things to Look for in a Signing Bonus
When you’re looking at your job offer and trying to negotiate the signing bonus, there are a few key things you need to look at. These are all things that you can—and should—negotiate when you receive your offer.
The Amount of the Bonus
Of course, the first thing most people will see when looking at a job offer that comes with a signing bonus is the amount. Seeing that you’ll get an upfront bonus of $10,000, $20,000, or more is exciting.
This one is simple to evaluate. The more you’re offered, the better.
Requirements for Earning or Keeping the Bonus
The next thing to look at is whether the bonus comes with any requirements for how you can earn it or whether there are conditions you have to meet to keep the bonus. This is where looking through the fine print is key.
For example, some offers may come with a sign-on bonus that isn’t a simple cash payment. Instead, it’s a forgivable loan with no monthly payment. To get the loan forgiven, you may need to stay at the job for a few years. If you leave before the loan is forgiven, you’d have to pay back some or all of the bonus.
Bonuses without these kinds of requirements are better than those that do have requirements or conditions. If you do choose to go with an offer like this, do your best to fulfill the requirements and make sure you keep enough cash on hand to pay off any money you’d owe if you leave the job early.
How You Can Use the Bonus
Some offers could place limitations on how you can use the bonus you receive. For example, the offer may not be for a signing bonus but a relocation bonus that can only be used for costs related to moving for the new job. Other offers could be for a lump sum payment toward your student loans rather than as cash that you can use for other purposes.
A simple cash bonus is the clear winner because you can use the money for anything, but even bonuses like relocation money or payments toward your loans are valuable if you can use them.
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How to Negotiate for a Bonus
Once you’ve received your offer and examined the details surrounding compensation and your potential signing bonus, the first thing to do is figure out what aspects of your bonus offer you want to negotiate over. Once you know your goals—whether they are increasing the amount, removing requirements to keep the bonus, or something else—these tips can help.
Know the Market
When it comes to negotiating compensation of any kind, including signing bonuses, knowing the market is essential. For example, the average physician in pediatrics makes $260,000 per year. If you get a job offer that pays $350,000 and has no signing bonus, you might want to reconsider negotiating for a bonus because you’re already getting a great deal.
If the offer is for $150,000 with a small signing bonus, you know that you’re getting underpaid and probably have more room to negotiate the offer. If you know what you’re worth, you have more data to provide during the negotiation process, which gives you some amount of leverage.
Practice Your Talking Points
Negotiating can be stressful for anyone, especially if you’re not very experienced with the process. Before you start the negotiation, sit down and talk through your points with someone else so that you have some practice. You should articulate exactly what you’re asking for, such as the amount of the bonus you’d like to receive, and explain why you should get what you want.
Consider the Whole Offer
The signing bonus you receive is just one part of your job offer. There are a lot of other things to consider even beyond the compensation package.
Think about other aspects of the offer—such as on-call commitments, non-compete agreements, restrictions on other work you can do, etc. If you’re willing to budge on some other aspects of the offer, such as accepting a bit more on-call time, you could get a better signing bonus.
Get It in Writing
Mutual trust is important in any relationship, including employment relationships, and you and your potential employer should be negotiating in good faith. However, even if your employer agrees to something in a negotiation, you should still take steps to protect yourself.
The last thing that you want is for your employer to agree to give you a larger signing bonus only to later claim they never agreed to do so. Make sure you put the details of any negotiation and what was agreed upon by both parties into writing so that you have a record of it.
More information here:
28 Things You Can Negotiate Besides Salary
Things to Ask for in a Physician Contract
Should You Even Want a Signing Bonus?
Signing bonuses are exciting. Who wouldn’t want to get tens of thousands of dollars upfront before they even start working?
While getting a big bonus can be exciting, it’s worth thinking about whether the bonus is really in your best interest. Your potential employer could be trying to entice you with a bonus to compensate for some other weakness in the offer.
For example, consider two hypothetical job offers.
Job 1: $250,000 salary, $25,000 bonus
Job 2: $265,000 salary, no bonus
Which offer is better? That can be hard to say. The first job will give you $275,000 in the first year and $525,000 over the first two. The second will earn you $10,000 less in the first year, but $5,000 more over the first two.
If you don’t need the bonus money for something like moving expenses, you might consider the second offer because you’ll earn more in the long run. Plus, if your raises are based on a percentage of your pay, assuming both offers provide the same percentage raise, taking the second offer will mean larger raises each year.
There’s something to be said for negotiating away your bonus if you don’t have an immediate need for cash and if you can increase your other compensation in a way that leaves you better off in the long run.
That’s not to say that physician signing bonuses are a bad thing to see in an offer or to look for. Just be sure to examine every aspect of your offer and don’t be afraid to negotiate for the deal that is right for you.
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