How to Negotiate an Increased Physician Signing Bonus — And What To Do With It

Fall is upon us, and that means final year resident physicians and fellows are busy on the interview trail. Hands will be shaken, dinners will be eaten, and contracts will be presented.

 
Today’s guest post is from Rebecca Safier. She writes for Student Loan Hero about education, careers, and other personal finance topics.

I was given a few topics to choose from, and I thought today’s topic of signing bonuses was timely. I once took a job with a $100,000 signing bonus. It’s true, but there were strings attached. I would have been better off negotiating an extra $20,000 a year into the salary and taken no signing bonus.

Let’s see what Rebecca has to say about signing bonuses and what to do with them.

 


How to Negotiate an Increased Physician Signing Bonus — And What To Do With It

 

After spending most of your 20s in college, medical school, and residency, you’re probably eager to start working as a doctor and making a doctor’s salary. After all, medical school didn’t come cheap, and you have the student loans to prove it.

But before you start work, you must agree on a contract with your new employer. As with your salary and benefits, your signing bonus is up for negotiation. According to The Medicus Firm, the average signing bonus for physicians in 2017 was $30,000 — but the largest was $200,000.

So how can you negotiate for an increased signing bonus without risking your chances of getting hired? Here are some tips on the process, as well as advice on what to do with this cash windfall once you get it.

 

where physicians earn up to $60 USD a month and can’t negotiate

 

Do research so you know what’s a reasonable request

 

According to a report by HealthLeaders Media, The Medicus Firm helped 9 out of 10 physicians hired by the firm get a signing bonus in 2016. Of those doctors, 34.2% received a bonus between $25,000 and $75,000, and 4.2% received bonuses of $100,000 or more.

As you can tell, signing bonuses vary greatly. The amount depends on several factors, including your field of medicine and prospective place of employment. For instance, surgeons can typically expect to receive a larger signing bonus than doctors who practice family medicine.

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And rural hospitals might offer hefty signing bonuses to attract talented doctors who otherwise don’t live in the area. Recruiters in major cities, on the other hand, often don’t need such big incentives since they have a line of well-qualified applicants out the door.

So when considering what’s an appropriate signing bonus, don’t pick an arbitrary number such as the amount you’d need to pay off your student loans, as wonderful as that would be. Instead, try to dig up data on your prospective place of employment, as well as the signing bonuses that have been received by others in your field with a similar level of experience.

If you can back up your request with data, you’ll have a better sense of what’s a reasonable signing bonus for which to ask — and what’s not.

Determine what you’ll accept and what you won’t

 

Once you have a figure in mind, clarify your priorities before going into negotiations. Of course, not everyone’s finances will allow them to be selective. But if you have some wiggle room, make sure you know what you’ll accept — and what number will make you walk away.

And don’t forget to take every form of compensation into account, including base salary, annual bonuses, and benefits such as health insurance, malpractice insurance, or student loan repayment assistance. Even if the signing bonus isn’t much, all the other parts of your compensation might make up for it.

Consider bringing in an attorney or professional negotiator

 

Doctors’ contracts can involve complex agreements and large sums of money, and you spent years studying to be a physician, not a lawyer. If you don’t know your value or you’re not confident going through the process on your own, it could be in your best interest to bring in an attorney or professional negotiator.

According to Physicians’ Advocates, bringing in a professional is more likely to impress the employer than alienate them. Hiring an attorney or negotiator could send a message that you’re careful about the business aspect of your contract.

Of course, context is everything, so use your best judgment on whether having an advocate negotiate on your behalf would be helpful.

 

Find out if any strings are attached to the signing bonus

 

Besides figuring out your bottom line, you should also be cautious about accepting a signing bonus if you’re ambivalent about the workplace. Even if you have a short contract, accepting a large signing bonus could send an underlying message that you intend to stay at the practice for a long time.

Some employers even require doctors to return signing bonuses if they leave before a certain period. Whether your bonus has this stipulation, it’s probably best to make sure you’re committed to a workplace for the foreseeable future before accepting a big bonus check.

Use this windfall to make a dent in your student loan debt

 

Once you’ve agreed on a signing bonus, your next step is figuring out what to do with it. Although not the most fun option, putting it toward your student loan debt could be the most financially responsible in the long run.

According to the Association of American Medical Colleges, the average doctor graduated with nearly $190,000 in student loans in 2016. Although that’s a crushing amount of debt, you can likely pay it back, maybe even ahead of schedule, on your doctor’s salary.

Or if you went into a lower-paying role, you might qualify for student loan repayment assistance or Public Service Loan Forgiveness. Whatever approach you take, consider putting some or all of your signing bonus toward your student loans.

With an extra payment, you can save money on interest and get out of debt more quickly. Check out this Student Loan Hero calculator to see how much interest you can avoid by making a lump-sum payment.

 

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