Are employers offering what employees want?
More counteroffers are on the table for many of New Zealand's workplaces this year in a sign that the competition for talent is tighter than ever, according to a new report.
A survey by Frog Recruitment among over 1,000 hiring managers revealed that 79% have offered more counteroffers in the past 12 months to March than in the previous years.
For 33%, counteroffers made a significant impact in their hiring process, but for more than a quarter, these counteroffers are made to departing staff.
This shows how management will do "everything possible" to retain talent employees that they consider valuable to their organisation, according to Frog Recruitment Managing Director Shannon Barlow.
"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," Barlow said in a media release.
According to Frog Recruitment, salary increases and title changes are the top counteroffers that they made to departing staff.
Negotiations on growth opportunities as well as more flexibility were also carried out, as many executives across the world demand employees to return to the office.
But what do employees really want to make them stay?
In another survey of almost 1,000 employees, 45% of the respondents said a higher salary would stop them from leaving.
"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," Barlow said.
One in five also said a change in management could make them stay, reflecting the impact of workplace culture in employees' decision to leave.
"Culture and wellbeing at work still rate as priorities for employees in 2023," Barlow said.
In making counteroffers, Barlow advised employers to take note of how money remains an "effective tool" for retention.
"However, from an employer perspective, it is essential to identify the deep roots of these resignations, as money often acts as a band aid to cover deeper issues," she said.
Barlow also gave employers a heads up on how counteroffers can be viewed by the rest of the team, citing the case of a PR agency whose employees thought it was unfair that two resigning staff were offered salary increases and job title promotions just to stay.
"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," Barlow said.
During the hiring process, the managing director recommended building a relationship with the candidate before the negotiation begins.
"This is key to identifying flags that could impact candidates' decision-making and potential counteroffer scenario," she said.
