Startups handing out Rs 4 crore bonus packages to retain talent

Wooing the perfect talent has turned out to be the new reality show in the job arena. Startups as well the established companies are luring job seekers with bonuses "sometimes up to six months of total annual cost to company”.

As per a news report in The Economic Times, Executive search firm EMA Partners International recently hired a CXO for a manufacturing company with a total joining bonus of Rs 4 crore worth of stocks payable over three annual instalments. This March, Indian Hotels shareholders approved Rs 1.92 crore ($300,000) joining bonus for Rakesh Sarna, its new managing director.

With heavy money getting pumped in, startups such as Flipkart, Jabong, Snapdeal, Urban Ladder, Zomato among others are offering joining bonuses to senior level employees.

While in the past, joining bonus was an offer to compensate for monetary loss of quitting an organisation before the completion of an appraisal cycle on a case-to-case basis, the companies are now doling out the risk premium to the prospective hire.

Joining bonus is largely to take care of future losses, if any, for people who take risks by quitting their roles in large organisations or (for) people with specialised skills and not easily available in the job market," R Suresh, managing director, RGF Executive Search told the ET.
The ET report further reads, it’s a win-win for the company as well. These days joining bonuses often come with a 'claw back' clause. If one takes a joining bonus, one needs to work for a certain duration, usually two years. And, if one leaves before that period, one has to return the money for the proportion of time one did not work.