Australian employers are increasingly relying on counteroffers to retain staff but this is often only a short-term solution, a new report suggests.
Research by recruitment agency Robert Half – based on a survey of 500 finance, accounting, IT, tech and HR hiring managers – found most Australian employers are putting forward counteroffers to workers who have received a job offer.
A counteroffer typically involves offering better pay or conditions in an effort to convince an employee to stay.
But these efforts frequently fail to keep the workers over the long term.
The survey found that 85 per cent of respondents had made a counteroffer to an employee who had received another job offer.
Only six per cent said they never make counteroffers, while just under one in 10 said they haven’t needed to extend one in the last year.
Counteroffers not working in the long term
Even with a counteroffer on the table, their success is limited.
Less than half of employers said the employee ultimately stayed with the organisation.
Nearly one-third said the worker left within a year despite accepting a counteroffer, while just under 10 per cent said employees rejected the offer outright.
Robert Half director Nicole Gorton said the prevalence of counteroffers highlights the intensity of competition for talent
“For tech companies, the rise of counteroffers highlights just how competitive and fragile the talent market has become,” Gorton told Information Age.
“While they may help retain employees in the moment, the data shows they are often a short-term fix, with many still leaving within a year.
“This points to a more deliberate and values-driven workforce.
“Employees are chasing career growth, flexibility and meaningful work alongside higher salaries, and are often already committed to leaving before a counteroffer is made.”
More than 90 per cent of respondents said staff turnover was a significant concern for their organisation.
While more than one third of employers viewed counteroffers as a valuable retention tool, 20 per cent acknowledged they are a temporary fix that did not address why employees wanted to leave in the first place.
Reactive rather than proactive
Gorton said the findings show counteroffers should not replace proactive retention strategies.
“Organisations need to focus on career development, regular salary reviews and stronger engagement strategies to address the root causes of turnover before employees start looking elsewhere,” she said.
“Importantly, burnout is still a consistent driver of resignations.
“Many professionals say they are leaving because they feel overworked and under resourced, reinforcing that decisions to move on are rarely made lightly or reversed by a counteroffer alone.”
The findings align with separate research showing Australian workers now place greater value on career progression than salary.
More than one-third of job seekers and 40 per cent of employers surveyed said limited career opportunities were the primary reason employees resigned, ahead of uncompetitive pay.
