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Counteroffers on the rise to retain staff

Counteroffers on the rise to retain staff

Although some are concerned it will impact salary structure, counteroffers have rising this past six months as staff retention finally becomes a key priority. Is this last ditch effort enough?

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April 1, 2012 11:12 by



More than 71 percent of senior HR executives are concerned their companies are losing their top performers this year and are resorting to counteroffers to retain those staff, according to research commissioned by specialist recruitment firm Robert Half UAE.

Nearly four in 10 (36 percent) executives say that it has become more common for their organisation to issue counteroffers to employees tempted by other jobs.  The figures suggest that with increased hiring activity from competing organisations, companies are increasingly ardent about keeping high performance professionals on board.

Despite the rising prevalence of counteroffers, only 39 percent of employers say it is at least somewhat common for employees to accept a counteroffer. This suggests that additional remuneration is only part of the reason employees leave for other opportunities. When senior executives were asked why they would not counteroffer, 32 percent said that they would not do so because they would be unable to see a future for disgruntled employees.  Nearly one in four (23 percent) said that they would not make counteroffers because employees would end up leaving the business in any case.Yet awareness of the risks associated with counteroffers appears to be relatively high.

The survey asked 75 Dubai-based senior HR executives about their hiring plans for the first half of 2012. Given this situation, how many of you would stay? And how many of you would say “too little too late”? The biggest concern (37 percent) reported by senior executives about issuing counteroffers was that a department’s salary structure would become skewed, potentially opening a company up to suggestions of unfair disparities in remuneration for similar positions.  This was followed by worries that the employee would be less loyal to the organisation (23 percent) and that relationships between the employee and their manager or coworkers would become strained (19 percent).

James Sayer, associate director, Robert Half UAE said: “Our research shows that there is buoyant hiring activity through the first half of 2012 and companies are starting to realise that they need to recognise their top performers or risk losing them to other organisations. While some companies may be tempted to provide counteroffers, this often only works as a temporary solution, with the employee leaving shortly thereafter. In order to keep their best employees, companies need to ensure that they are paying competitively with an appropriate salary and bonus structure.”

Companies should also consider introducing a comprehensive benefits plan to not only encourage business-critical professionals to stay, but also present the company as an attractive place to work to potential candidates. When asked what rewards and employee benefits they plan to offer as an effort to attract and retain employees, the top responses were mobile/laptop (88 percent), health care (59 percent), car allowance/company car (51 percent), pension contribution (45 percent), meal/lunch vouchers (39 percent), additional bonuses or pay (39 percent), flexible work hours or telecommuting (28 percent) and housing or relocation assistance (28 percent).

Sayer continues: “Top performers who feel they’ve made concessions during the recession will expect to be rewarded for their loyalty.  It is therefore essential for all companies to have a comprehensive remuneration programme where they conduct regular salary reviews with all employees, even if increases are modest or deferred. By having ‘stay conversations’ on an ongoing basis, managers can ensure employees remain satisfied while mitigating the risk of losing business critical professionals to other opportunities.”

There are numerous resources available to help hiring managers determine employee remuneration, including the 2012 Salary Guide from Robert Half. Speaking to a recruitment consultant can also provide insight into industry standards for financial and non-financial benefits, and help position an organisation competitively in the marketplace.



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