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Kiwi Employers Pulling Out The Stops To Entice Workers To Stay

The Year of The Counteroffer


Kiwi employers and resigning employees are engaging in counteroffer combat more than ever, and bosses offer a range of workplace carrots to tempt them to stay put.

The annual Frog Recruitment Market Report surveyed over 1,000 Kiwi employers representing more than 500,000 employees and reported that 79 percent of hiring managers said they had engaged more counteroffers in the twelve months to March than in previous years.

More than a quarter of those surveyed said they are increasingly presenting counteroffers to resigning employees, with salary increases and title changes topping the negotiation list. The report also noted on the negotiation table are requests for more flexibility (17 percent) and growth opportunities within the company (17 percent).

Frog Recruitment Managing Director Shannon Barlow says counteroffers have been more commonplace in the last two years due to candidate shortages.

“Talented employees are valuable to a company, and in a tight employment market, management will do everything possible to retain them. Losing a key employee can be costly in time and money – there’s lost productivity, training costs for a replacement and recruitment costs. In many cases, there is also concern about the effect of that person leaving on the rest of the team or the company’s reputation in a very competitive environment.”

In an online poll this week, Frog Recruitment asked almost 1,000 employees what counteroffer would stop them from leaving their role, and a higher salary (45 percent) trumped the list.

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“Cost of living pressures and employees’ salary expectations are driving counteroffer conversations, resulting in the multiplication of salary and benefit negotiations at the offer stage.

“For managers seeking new recruits, we recommend building relationships with potential candidates before they enter a negotiation. This is key to identifying flags that could impact candidates’ decision-making and potential counteroffer scenario. The candidate may be less likely to walk away from a new position if you have already started building rapport with them or have shown to have invested time in them before commencing employment.”

Barlow said one in five said a change in management would make them reconsider their resignation, adding the saying ‘people don’t resign from their jobs, they resign from their managers’ rings true.

“We’re seeing in this result the fact that after remuneration, culture is incredibly important to employees. If a workplace culture is toxic or has ineffectual management, workers are likely to leave, and no counteroffer, however attractive, will entice them to stay. Culture and wellbeing at work still rate as priorities for employees in 2023.”

However, Barlow said offering a higher salary or advancement ‘up the ranks’ with a new title can often present issues for other employees.

“Recently, a PR agency offered two resigning employees salary increases and job title promotions. The rest of the team felt this was unfair as they were not being rewarded in the same way – some referred to them as ‘fake resignations’, leading to low morale in the office. Loyalty is sometimes highlighted when an employee has been vocal about resigning but is lured to stay. Employers must be clear about how everyone across their business will perceive their counteroffers.”

Counteroffers are also becoming more commonplace when recruiting new staff, with a third (33 percent) of all employers surveyed in the Frog Recruitment Market Report saying it significantly impacted the duration of the hiring process. Barlow says counteroffers are adding a new layer of complexity to the recruitment process.

“For employers, counteroffers can be valuable in their HR toolbox. With the current cost of living pressures, money will remain an effective tool to entice employees to stay. However, from an employer perspective, it is essential to identify the deep roots of these resignations, as money often acts as a bandaid to cover deeper issues.”



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