Many firms offering counteroffers to retain employees

A new survey has revealed that many UK businesses have been using counteroffers in order to keep their employees.

According to CIPD findings, as many as 40% of employers have made a counteroffer over the last 12 months to keep their key staff.

Of the employers who made offers, 38% matched the salary of the new job offer and 40% offered even higher sums.

The CIPD has raised concerns that with research showing that just 22% of employers that make counteroffers have a formal policy, 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.

Jon Boys, senior labour market economist for the CIPD, said, “The fact that counteroffers are so widespread suggests they do have a role in matching people and jobs.

“Employers need to approach them with caution though and have clear internal processes for when these situations arise.

“Counteroffers may help to retain key staff and avoid knowledge drains and the cost to hire new people, but this must be weighed up against other considerations.

“For instance, counteroffers could exacerbate pay gaps, cause equal pay challenges, or result in a drop in employee engagement. They may also only work for the short-term.

“While pay is often the most typical focus of a counteroffer, there are other things employers should consider in making roles more attractive, such as flexible working, additional paid holiday, opportunities for career development, or better pension contributions.”

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