While counteroffers are common practice for Australian companies, they are generally ineffective in today’s competitive employment market. Read more here.
94% of Australian CFOs have made a counteroffer to employees in a bid to retain them.
66% have made a counteroffer to an employee who ended up leaving the company.
68% say the main reason for providing a counteroffer is to avoid hiring costs for a replacement, 60% refer to a desire to keep knowledge within the company, and 40% cite a smaller talent pool of candidates.
While counteroffers are common practice for Australian companies, they are generally ineffective in today’s competitive employment market. According to independent research commissioned by specialised recruiter Robert Half, more than nine in 10 (94%) Australian CFOs have extended a counteroffer while 66% of the same CFOs also say that the employee ended up leaving the company.
Extending counteroffers appear to be common practice in Australian businesses with more than one-third (34%) of Australian CFOs ‘always’ making a counteroffer to their finance employees in a bid to retain them. A quarter (25%) apply this practice ‘often’ and 26% ‘sometimes’. Almost one in 10 (9%) say they ‘rarely’ make a counteroffer and merely 6% say they have ‘never’ extended one.
However, acknowledging the ineffectiveness of counteroffers, two-thirds (66%) of the business leaders who have made a counteroffer say their employee ended up leaving the company, with 37% saying the staff member left within six months, 20% saying the employee stayed for less than a year and merely 9% cite he/she stayed over a year.
The costs related to replacing an employee, including onboarding and professional development are a key driver for 68% of CFOs who have made a counteroffer. Six in 10 (60%) cite the desire to retain knowledge within the company as one of the main reasons for making a counteroffer, while 40% point to a shortage of skilled finance professionals.
“If companies are confronted with the sudden departure of a skilled staff member, the use of interim managers and temporary employees is a way to ensure business continuity until a permanent replacement is found,” concluded David Jones.
Source: Independent survey commissioned by Robert Half among 151 Australian CFOs – multiple answers allowed.