But workers rarely accept money to stay, survey shows
It is becoming more common for employers to offer resigning staff a counter-offer to stay with their company, research has shown.
As employers worry about losing key talent, one in four (23 per cent) senior HR professionals say their organisation is now more likely to make a counter-offer than previously, found a survey by recruitment firm Robert Half. The trend comes as three in four (72 per cent) of respondents said that losing top performers was a growing concern for them this year.
However, there is little evidence that promising a pay rise induces many resigning employees to stay. More than half (53 per cent) of respondents said it was ‘uncommon’ for a counter-offer to be successful while only three in ten (31 per cent) said it was ‘somewhat’ common for them to accept. Over a fifth (22 per cent) say they would never make a counter-offer, because they believe that disgruntled staff would be better off going elsewhere and that they will end up leaving the business in any case.
HR executives were also highly aware of the risks associated with counter-offers, with the biggest concern (40 per cent) being that a department’s salary structure would become skewed, opening a company up to suggestions of unfair disparities in pay. Other concerns were that the employee would be less loyal to the organisation (28 per cent) and that relationships between the employee and their manager or co-workers would become strained (25 per cent).
Instead of making counter-offers, the figures showed that employers should pay more attention to their salary structures and the competitiveness of their reward and prevent employees resigning in the first place, the researchers suggested.
“Some organisations have been challenged in remaining competitive amidst static remuneration increases and as such, run the risk of losing top talent to other organisations. In order to keep their best employees, companies need to ensure that they are paying competitively with an appropriate salary and bonus structure,” said Phil Sheridan, managing director of Robert Half UK.
“Top performers who feel they’ve made concessions during the recession will expect to be rewarded for their loyalty. Employers should therefore conduct regular salary reviews with all employees, even if increases are modest or deferred. Regular dialogue with employees on a monthly or quarterly basis is vital to ensure that they remain satisfied with their role and career progression with the company.”
When asked what rewards and benefits they plan to offer more of this year to attract and retain employees, the top responses in the survey were pension contribution (39 per cent), flexible work hours or telecommuting (38 per cent), health care or life benefits (30 per cent), additional bonuses or pay (29 per cent), a mobile/laptop (27 per cent) and subsidised training/education (27 per cent).
Discontent over pay has been stoked in the last 12 months by the soaring cost of living. However, this week saw a dramatic fall in both RPI and CPI measures of inflation, which may go some way towards easing employee relations fears.