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Counter-offering returns to ‘talent-short’ job market

Despite it being an ineffective staff retention method, “Counter Offering” is increasingly being used as the tool of choice by employers of IT professionals as they struggle to hold onto quality talent in a rebounding market, according to specialist IT recruiter Greythorn.

Sean Roocroft, Greythorn’s NSW Director, says counter offering has returned to the market with a bang during the first half of 2015 as many employers remain stuck in the defensive mode they adopted last year.

“Employers have been caught out by how quickly the market is now moving, particularly around IT projects such as security, mobility and digital. These candidates are in short supply and highly sought after, employers don’t want to let them go. However, relying on a counter offer strategy in this type of market is not effective and, ultimately, very costly.

Many employers have not proactively increased salaries for their current staff and are reacting to these changed market conditions only when faced with the possible loss of current staff. This is creating a great deal of frustration among employees,” Roocroft said.

Roocroft says he eschews counter-offering, believing there are more effective ways for employers to retain their staff.

“Our experience tells us most employees who accept a counter offer will leave the organisation within six to twelve months anyway. Counter offering employees is a very short-term strategy.”

“A better option is to ensure the employment experience being offered is as good as it can be, day in, day out. Employers need to find out what motivates their IT personnel and then improve satisfaction around those drivers.

“By the time you have a resignation letter on your desk or find yourself involved in a counter offer situation the battle, and the employee, is already lost.”

The return to a ‘talent short’ employment market is not limited to permanent roles, according to Greythorn’s Managing Consultant of Contracts division, Lindsey Greenaway, who says “IT projects are picking up and we are once again seeing contractors with multiple job offers on the table at any one time.”

Greenaway says employers seeking to hire contractors need to be prepared to move quickly.

“This means having time for interviews available in your calendar, ensuring all relevant approvals are in place and most importantly, ensuring you have an attractive offer for contractors. I would advise all employers to do their research or seek guidance on this as rates that were competitive 12 months ago are no longer competitive in this climate.”

And, in the current market, Greythorn has some advice to employees, including:

•    If you are presented with a counter offer remember why you wanted to leave originally and ask yourself, will anything fundamentally change?

•    Don't use a job search as a pretext for getting a counter offer. Ultimately, this will only damage your reputation with recruiters and employers

•    If you are unhappy with your salary and think you are being underpaid talk to your employer and give them an opportunity to respond and review your salary

•    Should you accept a counter offer be prepared for potential consequences. Showing your employer that you are prepared to leave can affect your credibility and create an element of distrust with your employer if you then stay.

And, also advice to employers

•    Avoid counter offers: if your employee wants to leave, let them leave! Convincing someone to stay may seem like a good solution at first; however experience indicates that this is a short term solution. In almost all situations the individual will leave within 6-12 months of accepting a counter offer

•    Build effective and proactive retention strategies for your existing staff, including offering training, flexibility, interesting or challenging projects and improved benefits

•    Ensure you keep abreast of current market rates and that the remuneration you offer is in line with competitors. Most recruitment agencies have current salary indicators on their websites for employers to benchmark against

•    Conduct regular employee surveys to ensure you understand what drives and motivates your employees


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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).