Big Blue-Collar Bonuses

Some companies looking to fill hourly positions are using big bonuses to lure workers to less-crowded markets.
By: | May 1, 2018 • 3 min read
signing bonuses as incentives

A $25,000 signing bonus for mechanics, electricians and other hourly workers?

That’s apparently what one U.S. railroad company is offering in an attempt to ease its hiring troubles in this era of low unemployment (a 17-year-low of 4.1 percent).

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BNSF Railway, a nationwide freight railroad company with tracks in 28 states, aims to hire 3,500 workers this year, according to the Washington Post.

“We want to meet our customers’ needs, and we’re going to do what we need to do to hire for our company,” said Amy Casas, the railroad’s director of corporate communications.

Other blue-collar industries, such as construction and security, are also giving extra cash to new hires, but there are often strings attached whenever a bonus is awarded. Indeed, the BNSF signing bonus will be paid out in installments over three years, Casas told the Post, and vary depending on an applicant’s skills. (The incentives start at $15,000, and the company declined to share how many employees have received them.)

Gary Painter, a public policy and economics professor at the University of Southern California, told the Post he expects to see more of these perks, which are more often associated with office roles:

“A shortage is only a shortage until you pay enough money to relieve that shortage.”

The trend could pull more workers from major cities to smaller job markets, where wages have historically been lower and housing is cheaper. Think: Nebraska, Indiana, Iowa — states with larger blue-collar communities.

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“Employers throughout the country will start to offer higher wages than they had two years ago,” Painter said, “and you’ll see people entering these medium-sized metro areas directly because they can get similar incomes at much lower housing costs.”

Bill Brown, chief executive of Ben Hur Construction in St. Louis, told the Post that as the economy strengthens, more people are investing in building projects and he needs more workers to meet the climbing demand.

Over the past year, his company, which employs about 450 workers, has increased bonuses to new hires and veteran workers by about a third.

While Brown declined to share the amounts of the bonuses his company is handing out, he did caution employers that finding new workers is becoming an increasingly expensive proposition.

“If you’re trying to court them,” he said, “you’ve got to get the checkbook out.”

Web Editor Michael J. O’Brien has been with HRE for more than a decade and holds a degree in economics from Boston College. He can be reached at [email protected]

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