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Counteroffers a stopgap retention strategy

July 18, 2018

Staff members who accept counteroffers typically leave the company in less than two years anyway, according to a survey by Robert Half International Inc. (NYSE: RHI).

Many companies are offering higher salaries to keep workers who state they plan to quit for a better job opportunity, but the research suggest this method serves only as a stop-gap retention strategy for employers and isn’t a long-term career solution for employees.

“Counteroffers are typically a knee-jerk reaction to broader staffing issues,” said Paul McDonald, senior executive director for Robert Half. “While they may seem like a quick fix for employers, the solution is often temporary. When employees accept a counteroffer, they will likely quit soon afterward.”

The research found 58% of senior managers across a variety of professional fields — including finance and accounting, technology, legal, marketing and advertising, and human resources — extend counteroffers to keep employees from leaving for another job. The primary reasons leaders said they extend counteroffers are to prevent the loss of an employee’s institutional knowledge and to avoid spending time or money hiring a replacement.

The senior managers were also asked, “On average, how long do employees who accept counteroffers remain with your company?” The mean response was 1.7 years. 

In a blog post discussing the survey, Robert Half provided five reasons making a counteroffer is counterproductive:

  1. A salary counteroffer isn’t a long-term remedy
  2. It can have a negative ripple effect
  3. A counteroffer can cause a dip in morale
  4. It could cause a rift in trust
  5. Counteroffers don’t improve employee performance

The online survey was developed by Robert Half and conducted by an independent research firm. It includes responses from more than 5,500 hiring decision makers in the US across a variety of professional fields.