Counteroffers: Do they help with employee retention?

New survey looks at success rate of counteroffers as retention strategy for Australian employers

Counteroffers: Do they help with employee retention?

Employers across Australia are warned against relying on counteroffers as a retention strategy — despite growing cases of employees accepting them.

Nicole Gorton, director at Robert Half, warned counteroffers rarely achieve long-term retention.

"They simply delay, rather than save the costs associated with hiring as, more often than not, employees end up leaving the organisation," she said.

She made the remarks as the latest survey from Robert Half saw 58% of employers reporting an increase in the number of job candidates who are accepting the counteroffers from their current employer instead of moving forward in a new role.

Gorton attributed this finding to employees prioritising cost of living, job security, and salary.

"Employees continue to be on the lookout for better opportunities and conditions, considering all options that are put on the table, including offers from their current employer who have the edge when it comes to job stability," she said in a statement.

Counteroffers as motivation

The report also found that 22% of employees believe a counteroffer would only keep them motivated for a short period of time.

Even employers agree with the sentiment, with only 20% believing that countermeasures are a good way to retain employees in the long-term.

"Rather than relying on reactive counteroffers, companies should proactively address their retention policies to ensure their teams feel heard, valued, and therefore less receptive to offers from competitors," Gorton said.

Boomerang employees on the rise

Meanwhile, Robert Half's poll also found that more employees are choosing to return to their former employer.

More than two-thirds (68%) of employers reported an increase in the number of former employees who want to return to their organisation, according to the survey.

"Many employees may have found the grass is not greener at another employer or regret a decision that may have been made in haste when a new opportunity presented itself post-COVID," Gorton said.

According to the director, hiring these so-called boomerang employees have advantages because of their "intimate understanding of the business and extensive market insights."

"However, while re-establishing a relationship with a former staff member can bring many advantages, it also poses risks if the issues prompting their departure remain unaddressed," she said.

"Understanding their career objectives, reassessing their skills, and being transparent about the current workplace dynamics are key to a successful return."

Robert Half's survey polled 500 hiring managers and 1,000 office workers across Australia.

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