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It should be the last line of defence for keeping staff on board, but the counteroffer is a tool more agency leaders may want to use as retaining experienced talent becomes harder.
Staff retention has been identified as one of the biggest industry challenges heading into 2024, according to MRI’s latest Real Estate Leader’s Outlook, with 61 per cent of the surveyed agency heads citing it as the second biggest concern in the coming 12 months after profit margin rehabilitation.
It’s not a challenge that real estate is alone in facing. According to Hays’ Salary Guide report for FY23–24, 88 per cent of Australian employers are experiencing skills shortages, with employers increasingly concerned about filling empty positions and therefore more invested in retaining the workforce they already have.
Moreover, the recruitment firm reported that while it might not be the best strategy for retention, employers are turning to counteroffers to try to win back departing staff.
While just 4 per cent of employers reported that they have the policy of always presenting counteroffers to resigning staff, a substantial 50 per cent said they now do so depending on the individual.
“In today’s market, employers are pulling out all the stops to retain valued and productive staff,” said Matthew Dickason, CEO of Asia Pacific at Hays.
But Mr Dickason added that the practice is also serving to exacerbate the challenges of the hiring process, elongating hiring times, adding greater negotiation and increasing the likelihood that staff who are offered new roles may decline.
“Many use counteroffers as a tool to fight for highly regarded employees. This can make it difficult for hiring managers to secure top candidates, especially when a counteroffer is made that’s hard to refuse,” he said.
In this challenging environment, real estate leaders may more often turn to counteroffers to keep prized staff in 2024, even if higher wages eat into the profit margins that they are delicately managing.
After all, a higher wage might in fact be a superficial hit to profits given the overall cost – and risk – associated with high staff turnover.
As MRI’s director of strategy and growth Josh Symons noted, a revolving door of staff means “loss of intellectual property, retraining time and cost, and high recruitment costs”.
In his view, investing in retention offers “the reverse of all those factors plus a continuum of customer relationships and expertise in your business”.
Of course, even if salary is the motivating factor for leaving, once an employee has prepared to leave, meeting their monetary expectations may not be enough to entice them to stay, so the counteroffer is really best used as a last line of defence, not a primary strategy for keeping staff.
Understanding staff pain points and attempting to address them before employees have another offer is key for business leaders in mitigating the issue in the year ahead. While increasing remuneration may play a role, Mr Dickason noted there are other strategies that can be put to use.
“It’s well known that salary is the most significant factor in talent attraction and retention, but it’s not the whole picture. Curiously, while the number of active jobseekers currently sits at less than one in five, a significant percentage are passively keeping an eye on opportunities. In such a market, employers must also see beyond the numbers and consider the ‘emotional salary’ they offer, consisting of the right mix of benefits, work/life balance, upskilling and personal fulfilment,” he explained.
Likewise, for employees presented with a counteroffer, he advised them to look past the dollar figure to ascertain if what is being presented will genuinely rectify the issues that caused them to seek out other employment.
“If you’re considering a counteroffer, make sure that genuine action will be taken to rectify the issues that drove you into the jobs market. Every situation is unique, so make sure the counteroffer is worth staying for. If not, you’ll find yourself job searching again soon,” Mr Dickason said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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