Counter-offer to retain staff – good idea or not?
As part of efforts to keep key staff, 40% of UK employers have made a counter-offer in the past 12 months.
According to the latest Labour Market Outlook results from the Chartered Institute of Personnel & Development (CIPD), 38% of employers who made offers matched the salary of the new job offer and 40% offered higher sums.
The quarterly survey of 2,000 UK employers which scrutinises hiring, pay and redundancy intentions shows that employers continue to face pressure to pay higher wages to compete in the labour market. Employers expect basic pay increases to remain at 5% for the next 12 months, unchanged from the last two quarters, and counter-offers are regularly being made to keep key staff. This is expected to increase as recruitment and retention challenges persist.
However, the CIPD is warning that a lack of a formal process could result in issues relating to pay gaps, pay fairness across similar roles, and the organisation’s overall approach to reward.
Employers need to approach making a counter-offer with caution and have clear internal processes for when these situations arise.
Ensuring that a counter-offer is the best way forward to retain staff requires thought and consistency of approach. If you need to discuss this subject, please contact us on 0800 9995 121.