Get access to the exclusive HR Resources you need to succeed in 2018.
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 14 cities across the U.S. this fall.
Gain the skills you need to rise to the next level in your career. Jon us at SHRM's Leadership Development Forum, October 2-3 in Boston.
Survey finds most CFOs don't extend counteroffers to retain talent
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
Although employee retention concerns continue to mount, a new survey suggests counteroffers aren't the answer when it comes to keeping valued talent.
In research findings published in June 2015 by staffing firm Robert Half, eight in 10 (78 percent) chief financial officers (CFOs) said they don't extend counteroffers to keep employees from leaving.
One reason may be because CFOs believe this tactic can have a ripple effect. Among the 21 percent of CFOs who do make counteroffers, roughly one-third (34 percent) said doing so necessitated raises for other employees in the department.
The survey was based on interviews with more than 2,200 CFOs at companies in more than 20 of the largest U.S. markets.
CFOs were asked and responded:
“Do you ever extend counteroffers to employees to keep them from leaving for another job?”
Source: Robert Half
CFOs who said they'd extended counteroffers were subsequently asked and responded:
“When you have extended a counteroffer, did you also increase the salaries of any other employees in your department?”
“Counteroffers are not an effective retention tool," said Paul McDonald, senior executive director for Robert Half, in a news release presenting the findings. “Offering more money to someone to prevent him or her from quitting doesn't typically solve the issue that prompted that person to resign in the first place. It can, however, upset the company's salary structure, prompt loyalty concerns and foster resentment among the rest of the team who may feel that they, too, must threaten to quit to receive a raise.”
Businesses must regularly review their compensation levels, particularly in today's job market, McDonald added. “Waiting until an employee quits is too late to think about whether the salaries you offer are strong enough. Employees’ frustration over their salaries could fester into a bigger problem of feeling undervalued and unappreciated, which more money via a counteroffer won’t be able to remedy.”
Related SHRM Articles:
Reward Strategies Should Target Key Talent,
SHRM Online Compensation, May 2012
Make a Counteroffer—But Make Sure It's Not Just About Money,
Managing Smart, March 2008
How to Make a Counteroffer,
HR Magazine, November 2003
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 10,000 companies