Quitting? Not so fast: Employers fight for valued staff with counteroffers

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Published: 24 October, 2023
Over half of New Zealand employers consider counteroffering resigning staff as they look to retain their strong performers, according to recruitment and workforce solutions specialists Hays.
According to the Hays survey, while just 4 per cent of employers always counteroffer resigning staff, another 50 per cent do so depending on the individual.
“In today’s market, employers are pulling out all the stops to retain valued and productive staff,” says David Trollope, Managing Director of Hays in New Zealand.
“Many use counteroffers as a tool to fight for highly regarded employees. This can make it difficult for hiring managers to secure top candidates, especially when a counteroffer is made that’s hard to refuse.”

Advice for professionals

If your current employer responded to your resignation with a counteroffer, Hays advises you to consider why you decided to leave and if these issues will be solved if you stay.
“People leave jobs for a range of reasons, from a lack of new challenges to career advancement and a desire to feel valued,” says David.
“It’s rarely a decision made on a whim.
“After careful contemplation, if you decided that, for whatever reason, you weren’t happy in your current role, why would a pay rise, new job title or additional benefits be anything other than a superficial tactic to convince you to stay?
“Remember, your motivation to change jobs must have been genuine since you not only looked for a new job but applied, interviewed and accepted one. These are not the actions of a satisfied employee.
“Counteroffers are only successful long-term when an employer actively addresses the reasons that drove you to accept another job. Rather than offering a hollow new job title or a few additional benefits, for example, they must make real change that motivates, engages and develops your career. 
“If you’re considering a counteroffer, make sure that genuine action will be taken to rectify the issues that drove you into the jobs market. Every situation is unique, so make sure the counteroffer is worth staying for. If not, you’ll find yourself job searching again soon.”

Advice for employers

If you’re currently recruiting and worried that your preferred candidate may accepting a counteroffer, Hays advises you to craft your initial job offer carefully.
“Be strategic to ensure your offer is not only competitive but compelling,” explains David.
“Work closely with your recruiter to understand why your preferred candidate is job searching. What motivates them? What are their short and long-term career goals? What benefits would they value? What are their salary expectations? 
“Ensure your offer ticks all these boxes, leaving the candidate with no reason to accept a potential counteroffer.
“For instance, if a candidate’s current employer isn’t offering career progression opportunities, demonstrate a clear path for growth and development in your team.”
For employers who regularly counteroffer, Hays suggests a new approach. “While counteroffers do work sometimes, don’t rely on them,” says David. “At best they are a stopgap solution.
“Instead, understand the drivers of staff turnover in your organisation and fix the underlying issues to minimise the risk of employees looking elsewhere.
“Perhaps fostering a culture of continuous upskilling, training your managers and crafting clear promotional pathways, for example, could improve job satisfaction and reduce the risk of employees leaving.”
The FY23-24 Hays Salary Guide is based on a survey of almost 4,000, consisting of 1,904 New Zealand organisations and 2,048 New Zealand professionals.
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For further information please contact Kathryn Crowden at kathryn.crowden@hays.com.au

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