Finance:Golden hello

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Short description: Term used in accounting and contractual law

In accounting and contractual law, "golden hello" is a term used for several different arrangements:

  1. A payment made to induce an employee to take up employment from a specific employer[1] in form of a welcome package[2] or a payment from a rival employer to entice the employee to leave the other company.[3]
  2. A payment from a government to employer (private company) during an economic recession who takes on new staff, usually superfluously, when job openings in general are scarce.[2]
  3. In the United Kingdom , a financial incentive[4] for graduates in science, technology, engineering, and mathematics (STEM) who are pursuing a career in teaching.[5]

Risks and advantages

If the employee is worth the money

A hiring company may spend millions of dollars for a golden hello package,[3] hoping the poached executive generates more benefits for them than the cost of bonuses.[3] Following the financial crisis of 2008–2009, such compensation methods have become controversial.[6]

If the payment rate is right

It's difficult to make the payment rate be an incentive for employees.[7] Generally, employees who are senior-level receive higher golden hellos than entry-level or mid-level employees, considering the skills, experience and talent for specific positions.[7]

Attracting talented recruitment

In a study by Aerotek and the Human Capital Institute, 46% of professionals (570) at companies said that the best way to attract senior-level employees is bonuses.[8][9] Employers can offer a one-time signing bonus or promise a specific timeline for raises to salaries.[9]

Building trust between employee and new hire

Golden Hello build the foundation for a positive relationship between an employer and a new employee.[9] The study indicated that trust is built between employers and new hire when employers offer signing bonuses.[10] This is also incentive for new employers to work harder.[10]

Golden hello for academies

In the UK, a golden hello is financial incentive,[11] not for executives, but for attracting graduates in STEM[5] (science, technology, engineering and maths) into teaching in a maintained secondary school.[12]

The scholarships, funded by Department of Education, were introduced in 2011 and are offering £30,000[13] for graduates with a good degree in physics, chemistry, computing or maths in 2016/17.

According to the document of National College for Teaching and Leadership, golden hello is only available to teachers "who trained through a postgraduate initial teacher training (ITT) course leading to qualified teacher status (QTS)".[12][14] Teachers must meet the training, teaching and application criteria, in order to be eligible for golden hello payment.[12]

Golden hello for high-ranking executives

In the United States , golden hellos are typically offered to high-ranking executives by major corporations and may be valued in the millions of dollars.[15] They are said to have become "larger and more common" starting around the mid 1990s.[16][17]

Further reading

References

  1. ↑ Law, Jonathan (29 April 2010). A Dictionary of Accounting. ISBN 9780199563050. 
  2. ↑ 2.0 2.1 "Golden Hello - Definition of Golden Hello - QFINANCE". http://www.financepractitioner.com/dictionary/golden-hello. 
  3. ↑ 3.0 3.1 3.2 "Golden Hello Definition | Investopedia". http://www.investopedia.com/terms/g/goldenhello.asp. 
  4. ↑ "Golden Hello eligibility criteria and guidance for academies". https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/432769/golden-hello-eligibility-criteria-and-guidance-for-academies-including-free-schools.pdf. 
  5. ↑ 5.0 5.1 "Scholarships Get People Into Teaching But Can't Make Them Stay". https://www.forbes.com/sites/nickmorrison/2014/10/24/scholarships-get-people-in-but-cant-make-them-stay/. 
  6. ↑ "Golden Hello - Investing Dictionary". https://byforex.com/wiki/golden-hello. 
  7. ↑ 7.0 7.1 "4 Reasons Signing Bonuses Are Worth the Money". 3 February 2015. http://www.entrepreneur.com/article/242476. 
  8. ↑ "Recruiting Top Talent Survey". http://www.aerotek.com/downloads/Aerotek_RecruitingTopTalentReport%202014.pdf. 
  9. ↑ 9.0 9.1 9.2 "4 Reasons Signing Bonuses Are Worth the Money". 3 February 2015. http://www.entrepreneur.com/article/242476. 
  10. ↑ 10.0 10.1 Choi, Willie (2013-10-24). Can Offering a Signing Bonus Motivate Effort? Experimental Evidence of the Moderating Effects of Labor Market Competition. Rochester, NY. 
  11. ↑ Hopwood, Vicky (2004). Evaluation of the Golden Hello Initiative. ISBN 1-84478-246-8. 
  12. ↑ 12.0 12.1 12.2 "Golden Hello eligibility criteria and guidance for academies (including free schools)". https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/432769/golden-hello-eligibility-criteria-and-guidance-for-academies-including-free-schools.pdf. 
  13. ↑ "Bursaries and funding | DfE Get Into Teaching". https://getintoteaching.education.gov.uk/bursaries-and-funding. 
  14. ↑ "Scholarships Get People Into Teaching But Can't Make Them Stay". https://www.forbes.com/sites/nickmorrison/2014/10/24/scholarships-get-people-in-but-cant-make-them-stay/. 
  15. ↑ Definition of 'Golden Hello'
  16. ↑ Bebchuk, Lucian A.; Fried, Jesse M. (2006). Pay Without Performance. ISBN 9780674022287. https://archive.org/details/isbn_9780674022287. 
  17. ↑ "Pay Without Performance". http://www.law.harvard.edu/faculty/bebchuk/pdfs/Performance-Part2.pdf. 

External links



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