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Employers are offering resigning accountants +20% salary increases, according to WH Mark Sattin (part of FiveTen Group). The accountancy recruiter says that the average counter-offer made to departing employees was approximately +10% above their existing salary in 2008. In 2009 that fell to just +5%. But the best employees are now being offered an increase of up to +20% to stay in their current jobs.
Managing Director of WH Marks Sattin, Dave Way, said "companies have not been managing staff expectations around salary rises properly and that's led to a surge in counter offering. This has all been driven by the salary-freezes last year. Now the market is more buoyant, accountants across the country are looking for salary increases. Nothing wrong with that, but many people have been trying to negotiate a salary increase this year, factoring in the increase they feel they missed out on last year, in addition to the rise they would normally expect."
Naturally, that hasn't happened and, as a result, more candidates have started to jump ship. Now companies are reacting to the problem, rather than handling it proactively. They also need to build long-term talent pipelines and engage employees more, identifying these issues early on. They should expect staff turnover to increase as the market hots-up and start building their recruitment strategies to suit the climate."
The volume of counter-offers is also increasing. Across the UK, 5 out of 10 accountants are now being offered salary increases to stay in their job when they announce theyââ‚¬â„¢re jumping ship.
Dave Way said "during the downturn, employees stayed with their companies because they thought it was the safe thing to do. The perception was that 'last in first out' would see them kicked out of a new company if they moved jobs. Post-crisis people are a lot less nervous and there has been a significant increase in the number of job moves. In London 70% of candidates are getting counter-offered. It's 50% across the UK. Levels are also increasing in Paris, Zurich, Amsterdam, and Dubai. This is the year of the counter-offer."
Dave Way said "counter-offers are being made most frequently to keep accountants with two or three years' experience post-qualification. The Top 10 firms are seeing some of their best people leave for the Big 4. Having said that, the biggest salary increases are being offered in retail and investment banks. The only area where we aren't seeing a return of the counter offer is the public sector."
But WH Mark Sattin warns that counter-offers are not a cost effective talent management tool for employers. 75% of employees who accept a counter-offer leave the company within a year anyway.
Dave Way said "a counter-offer is almost always a short-term solution to a long term problem, it's the equivalent of putting a sticking plaster over a dirty wound. Counter-offers are often made by employers who don't understand what really motivates their employees. More often than not it is cheaper and more effective to act proactively, rather than reactively."