In accounting and contractual law, "golden hello" is a term used for several different arrangements: # A payment made to induce an employee to take up employment from a specific employer in form of a welcome package or a payment from a rival employer to entice the employee to leave the other company. # A payment from a government to employer (

private company A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...

) during an

economic recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by variou ...

who takes on new staff, usually superfluously, when

job opening Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...

s in general are scarce. # In the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

, a financial

incentive In general, incentives are anything that persuade a person to alter their behaviour. It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of ...

for graduates in science, technology, engineering, and mathematics (STEM) who are pursuing a career in teaching.

Risks and advantages

If the employee is worth the money

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

If the payment rate is right

It's difficult to make the payment rate be an incentive for employees. 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.

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. Employers can offer a one-time signing bonus or promise a specific timeline for raises to salaries.

Building trust between employee and new hire

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

Golden hello for academies

In the UK, a golden hello is financial incentive, not for executives, but for attracting graduates in STEM (science, technology, engineering and maths) into teaching in an maintained secondary school. The scholarships, funded by

Department of Education An education ministry is a national or subnational government agency politically responsible for education. Various other names are commonly used to identify such agencies, such as Ministry of Education, Department of Education, and Ministry of Pub ...

, were introduced in 2011 and are offering £30,000 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 The National College for Teaching and Leadership (NCTL) (inheritor of the site and functions of the National College for School Leadership (NCSL)) was an executive agency of the Department for Education (a United Kingdom Government Ministry wh ...

, golden hello is only available to teachers "who trained through a postgraduate initial teacher training (ITT) course leading to qualified teacher status (QTS)". Teachers must meet the training, teaching and application criteria, in oder to be eligible for golden hello payment.

Golden hello for high-ranking executives

In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

, golden hellos are typically offered to high-ranking executives by major

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...

s and may be valued in the millions of dollars.Definition of 'Golden Hello'
/ref> They are said to have become "larger and more common" starting around the mid 1990s.

References

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External links

Golden Hello
Investopedia
Investors shooting themselves in foot with acceptance of "golden hellos"

Golden Hello eligibility criteria and guidance for academies( National College for teaching&leadership)Can offering a signing bonus motivate effort?Scholarship Fundings from Department of EducationPay without PerformanceFour Reasons Signing Bonuses are Worth the Money
Business terms Employment compensation Recruitment