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7 Different Types of Nursing Bonuses Explained

Gayle Morris, BSN, MSN
Updated March 8, 2023
    Healthcare organizations are offering nursing bonuses for recruitment and retention. Before accepting a bonus, consider these options.
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    • The ongoing nursing shortages and added stress on nursing staff from the COVID-19 pandemic have caused healthcare organizations to expand their nursing bonus programs to attract qualified personnel.
    • Some bonuses are offered for positions with greater security risks or high turnover rates.
    • Nurses must evaluate any bonuses based on whether they can complete the requirements and if the position will help advance their personal or professional goals.

    Ongoing nursing shortages and the need for healthcare institutions to attract qualified staff have increased the type and amount of nursing bonuses offered to incoming and current staff. Bonuses are given in addition to base pay as an incentive to take a new job or remain in the current position.

    However, not all bonuses are a good idea for nursing staff, and sometimes nurses can negotiate a better bonus.

    We spoke with nurses who are familiar with nursing finances and have experience recruiting and hiring staff. Find out what they think about the types of bonuses currently available, how to negotiate, and what nurses should look for when they’re considering a nursing bonus.

    7 Types of Nursing Bonuses and Eligibility

    Nursing bonuses are a common way that healthcare organizations have rewarded and retained their nursing staff for over a decade. With growing nursing shortages and the added stress from the COVID-19 pandemic, healthcare organizations have expanded how these bonuses are awarded. New nursing staff and current staff are eligible for a variety of bonuses. These include:

    1. 1

      Sign-on Bonus

      A sign-on bonus is an incentive to attract qualified staff to work for the organization. Sign-on bonuses typically include added compensation and are often advertised on the company website. While they have become more common during the nursing shortage, it does not always indicate that the hospital is understaffed.

      Nurses can expect to sign a contract to receive a sign-on bonus. These are rarely lump sum payments but are more often paid out every pay period. In most cases, the sign-on bonus is paid out over the course of the first year of employment.

      Nurses who have specialized skills or experience may receive a higher sign-on bonus than others.

    2. 2

      Referral Bonus

      Referral bonuses are sometimes called recruitment bonuses. Hospitals or other large healthcare organizations may offer a small bonus to nurses who have referred healthcare providers who are hired by the organization.

      These bonuses can range from several hundred dollars to $1,500 or more. In many cases, nurses are eligible to receive the referral bonus when their referral works a minimum number of hours. Some organizations will continue to pay the referral bonus, even if the nurse leaves the organization before the person they referred has completed their minimum hours.

    3. 3

      Retention Bonus

      A retention bonus is a financial incentive that is offered to nurses who agree to stay with the healthcare organization for a specified time period. In many cases, they are paid out in a lump sum since the nurse must complete the time period before getting paid.

    4. 4

      Performance Bonus

      In an era when insurance companies are hinging hospital reimbursement on patient satisfaction and patient outcomes, some organizations are offering nursing bonuses based on performance. In this case, the nurse must meet a certain target or goal that is defined by the organization.

      A common performance bonus is typically associated with an annual performance review. However, while a nurse’s performance may be associated with an hourly raise, a performance bonus may be additional compensation paid out in a lump sum.

    5. 5

      Educational Bonus

      Healthcare organizations benefit from nursing staff with higher education. Some organizations offer tuition reimbursement for staff to help pay for their education. Others may offer an educational bonus to nurses who pursue and complete education in a particular specialty.

      Although not commonly considered a bonus, nurses may be able to negotiate higher compensation depending on their experience and educational levels.

    6. 6

      Shift Differentials

      Shift differentials are paid to nurses who work certain shifts, such as nights, weekends, and holidays.

    7. 7

      Overtime Pay

      How a company defines overtime is dependent on state law and the organization’s policies. In most cases, nurses who work more than 40 hours a week are eligible for overtime pay, which is typically more than the hourly wage.

      Eligibility for each of these nursing bonuses varies based on the organization and factors such as length of service, job performance, and educational level. Because eligibility requirements vary, nurses must check with their employer to determine eligibility for the available overtime nursing bonuses.

    Tips to Negotiate Your Nursing Bonus

    As of 2022, male nurses comprised only 9% of the nursing workforce. This has a significant effect on salary and negotiating for better bonuses. In a world where women are more likely paid less than their male counterparts, there is an added challenge that women often hesitate to negotiate for a better salary or ask for a raise.

    Women may find the notion of negotiation or haggling aggressive and scary. According to one paper, men are four times more likely to ask for a raise and women are more likely to be seen as aggressive, even when men and women follow the same script.

    When researchers sought a way for women to ask for a raise or negotiate for a better salary or bonus, yet avoid the backlash, they found some strategies that worked. The trick was to appear friendly, warm, and concerned for others.

    A common explanation for women earning less than men is that they are not as willing to negotiate for a better salary or higher bonus. Yet, there are ways to do it successfully. Nursing bonuses are an important part of the overall compensation package.

    Let’s consider these tips for the next time you’re in a position to negotiate a bonus.

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      Research, research, research

      “It is vital that you have a good understanding of the nursing bonuses offered in your geographical area. Consider using Glassdoor or Indeed to look at job postings and understand the range of sign-on or retention bonuses you might expect.

      You can find information about salary ranges, salary increase ranges, educational bonuses, and referral bonuses from human resources.

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      Know how much you’re worth

      “You must do an objective inventory of your qualifications, experience, and education that brings value to the organization. Come to the negotiating table with specific examples of how you have contributed to the success of healthcare organizations and your plans to continue to do so in the future.

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      Be flexible

      “Be open to the compensation you’ll accept as you negotiate your bonus. For example, while most nursing bonuses are strictly monetary compensation, you might have a greater interest in something else that the organization can offer.

      You might have planned to use your sign-on bonus to advance your education. If the sign-on bonus doesn’t meet your expectation, you might negotiate a retention bonus or an educational bonus that the organization does not yet offer.

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      Make your case

      “Healthcare organizations respond to data. You must have specific examples to demonstrate your value to the organization and data to back up your claims. For example, if you routinely have high patient satisfaction scores and good patient outcomes, be sure to highlight that and bring data to demonstrate it.

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      Include other perks

      “If the organization balks at raising your bonus, you may be able to negotiate more paid time off, professional development opportunities, or flexible scheduling.

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      Practice, practice, practice

      “For most people, negotiating a nursing bonus is nerve-wracking. It’s crucial to practice negotiation with another person. Consider videotaping the session so you can watch your body language and unspoken cues that may inadvertently express your nervousness.

    Financial Wellness Tips for New Nursing Jobs

    Nancy Mitchell is a registered nurse with over 37 years of experience as a director of care. She cautions nurses to read the fine print before accepting a sign-on bonus. These programs often are linked to a requirement for the nurse to stay employed over a certain period. However, she knows that many agencies offer higher bonuses for nurses to provide care in high-security areas like prisons.

    “Usually, the available staff don’t find the job appealing for safety or similar reasons. So it’s best to do your homework about the nature of the job before signing any contracts,” she says.

    As always, read the fine print on any contract thoroughly and be sure you understand the terms and conditions before making any commitment that could potentially impact your personal and professional life in the coming years.

    It’s crucial that you also determine how this job may help advance your career, experience, income potential, or other criteria that are important to your personal or professional development.

    Nursing bonuses are a significant enticement but should never be the primary reason you accept a nursing position.

    Meet Our Contributor

    Portrait of Nancy Mitchell, RN

    Nancy Mitchell, RN

    Nancy Mitchell is a registered nurse and contributing writer. She has over 37 years of experience in geriatric nursing care, both as a senior care nurse and director of nursing care.