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There are many reasons working professionals choose to leave an organisation and pursue an alternative direction in their career. Commonly, a huge driving factor has been financial reward, and this is still the case for a large proportion. However, there are multiple factors that contribute to employees choosing to accept a new role and progress their career:
When it comes to handing in a formal resignation to an existing employer, around 50% of employees are counter offered to encourage them to remain with the organisation – Forbes (2020). With the skill short market we are experiencing post pandemic, this figure is set to rise with more and more employers driven to retain talent. Around 57% of those who are encouraged to stay with their employer accept a counteroffer. However, according to LinkedIn (2021), 80% of those who accept a counteroffer go on to leave their employer within six months of the initial resignation.
In the current climate, retaining staff is a huge issue for organisations across all sectors. Business owners and leaders are not only struggling to attract new talent to their business, but they are reviewing existing processes and offerings to retain their staff who are seeking roles elsewhere. Competition in the market is fierce, wage inflation is increasing, and this results in an uphill battle when it comes to counter offers, specifically around financial reward.
What are the factors to consider when you receive a counteroffer?
1. The reason(s) for leaving your current role
Firstly, you need to think about the driving factor which has made you consider and accept a new opportunity. It’s important to consider this when a potential counteroffer is put forward to you, being offered an increased salary can often cloud judgment on what’s more important. Why did you make the decision to consider a new opportunity elsewhere? If your role was fulfilling and helping you work towards your career goals, why were you open to looking at something new?
2. What would make you change your mind and stay with your current employer
It’s important to consider what you may accept when it comes to a counteroffer, what is your bottom line? Think about what may encourage you to stay with your employer from a financial perspective, is there a figure you have in mind? Make sure you carefully consider your reasons for leaving, if the counteroffer doesn’t support this, then it may not be the right decision for your career. Does the counteroffer support your long-term career goals? What is most important to you in your role and your overall career development?
3. The short-term impact on your career
This ties in with both your reason for leaving the role and what would make you stay in the role. How important is it to you to make short term or long-term changes? If short term financial reward is important for you, then accepting a counteroffer may be the right decision. It is highly likely an individual will move on to a new opportunity within six to 12 months of a counteroffer if the counteroffer was accepted based on short term reward.
4. The long-term impact on your career
Being offered a higher salary, greater benefits and more responsibility in a role is fantastic, but does this contribute to your overall career goals? Are you choosing to stay with your company in the short term without considering the long-term impact on your career? Think about your career goals and what you want to achieve; ensure your decision allows you to develop and be challenged. Heidrick & Struggles carried out research in 2019 which highlighted nearly 40% of Senior Executive and HR Leaders believe that accepting counteroffers can have an adverse effect on an individual’s career.
When promises made at counteroffer stage are not kept
A Marketing Director accepted a new position with an increased salary and benefits package, along with an exciting vision they could contribute to. Their existing employer counteroffered with significantly more money and promised increased scope and responsibility with their role, which the candidate accepted. After five months, the Marketing Director moved on. The role remained static and there simply wasn’t the potential to keep to promises made at the time of counteroffer. While the increase in financial reward was a huge advantage in the short term, the role itself wasn’t fulfilling their needs, nor contributing to their overall career development and goals.
A Senior Project Manager was offered a new role with scope for development, greater work life balance, flexible working, and the opportunity to lead a team working on large-scale projects. As a counteroffer, their existing employer offered them an increased salary and scope for team growth which they accepted. After six months, the Senior Project Manager resigned. While the increase in salary was positive, it wasn’t the reason they had initially chosen to leave. They were still working long hours with little flexibility and internal budget cuts meant the growth of the team had been delayed indefinitely. Ultimately, their employer hadn’t lived up to the promises made at counteroffer.
When a counteroffer is considered and effective
A Sales Director was offered an exciting opportunity to move forward with their career, take on more responsibility and work across a bigger market with greater financial reward. After handing in their notice, they were invited to a meeting in which the board presented a potential career path for them to consider, including increased reward, responsibility, and scope to have the autonomy to develop themselves and a team within the business. The Sales Director accepted the counteroffer and remained with the organisation long-term.
Predominantly counteroffers are reactive as organisations demonstrate a ‘knee-jerk’ reaction to retain their staff. However, when a counteroffer is carefully considered to both fit in with business objectives and the employee's personal goals and driving factors, then it can be successful.
The 'War on Talent' - Bianca Yorke-Davies; Expert Recruitment Consultant at CSG focused on Construction Recruitment in the APAC market:
"The 'war on talent' has become increasingly challenging and companies are desperately struggling to attract the right talent. With many industries booming, team growth is needed and the loss of an employee could have a massive impact on the business. As a result of this, we have seen an increased number of counteroffers and companies are throwing whatever they can to keep employees. I have seen counteroffers with a $20,000 pay increase and companies offering to pay for master’s degrees (circa $50,000+). While this may be attractive for a candidate, I have already started to see some challenges this is causing:
How CSG Talent can support during the counteroffer process
The counteroffer process can be a stressful process for the candidate, the new and the current employer. At CSG Talent, we support candidates through the counter-offer process irrelevant of the outcome. It’s important for individuals to know and understand what is most important to them so their end decision reflects this. Candidates have the confidence and trust in our expert team that we will support them in the next step in their career journey and help them reach their end career goals in whatever way is best.
When we first engage with candidates who are either proactively seeking a new role or potentially considering a new opportunity, we find out their driving factors, what’s most important to them in a role and a company, alongside their career goals both short and long term. By establishing these facts in the first instance, we can effectively find them the most suitable opportunity, but it also allows us to manage a potential counteroffer process with a candidate and re-focus on those goals if that situation arises.
By carefully considering the key factors outlined, and establishing what is right for your overall career development, you will be able to make an informed decision about your next career move. If you're considering a new opportunity or plan to change career direction in the coming months, get in touch with our expert team at CSG for a confidential conversation. Our team can provide insight into market conditions, current or future opportunities and help support you to achieve your personal career goals.
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