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Are counter offers counter intuitive?

  • Publish Date: Posted 8 months ago

The latest Chartered Institute of Personnel and Development (CIPD) Labour Market Outlook has found that the use of counter offers is increasing, forming a part of many employers' retention strategies, and it’s certainly been something we’ve seen increasing in recent times.

How does this affect the green talent market?

We all know that counter offers are being used more and more as a way in which to retain valuable talent. The CIPD found that 40% of UK employers have turned to counter offers to entice key staff to stay. Of those giving counter offers, 38% matched the salary of the new role and 40% offered even higher. 

We’ve found at Allen & York that with some hard to fill positions, counter offering is happening more often, and it’s frustrating all round for those who are hiring and those trying to retain staff.  

Is the counter offer just a short term fix?

Figures vary, but estimates are anywhere between 50% - 90% of employees who accept a counter offer will ultimately leave their position within 12 months.  

Candidates won’t go for a new job unless they want to leave for a new challenge and are unhappy with their current job. The increase in pay will be nice for a while, but those feelings of dissatisfaction are likely to return later and don’t resolve the issues that made the employee want to leave in the first place. 

Short term gain, long term pain?

There is a skills shortage, particularly in really specialised niche roles, where there just aren’t enough people to fill the jobs available.  

Employers want to hold on to these valuable people, they are an integral part of their team. Combine this with the ‘corporate memory’ they hold, lack of any succession planning and the cost of recruiting a new member of staff and it’s highly likely that a lucrative counter offer will be put on the table.  

At the end of the day, the employee is still doing the same job that they wanted to leave. Sometimes things improve, but many times they don’t. 

A counter offer may work in the short term by keeping the employee in post but the fallout can be tricky for an organisation to deal with in the long term. Staff may feel resentful, effecting morale and potentially widening pay gaps and causing equal pay issues.  

It can be argued that new talent is needed to keep a business fresh and innovative, so should be embraced as a positive thing. A new face is always welcome, they bring with them new ideas and lots of enthusiasm.  Recruiting staff in a competitive market is tough. We have an unrivalled talent pool and innovative research techniques to find the right person for you. If you have a position that is hard to fill, give us a call to speak with one of our experienced recruiters on 01202 888986 or email