Counteroffers Ineffectual

Retain or let them go says Robert Half.

Counteroffers Ineffectual

Asia Pacific

Independent research commissioned by Robert Half has found the overwhelming majority (96 per cent) of Singaporean CFOs extend counteroffers to employees in a bid to retain them. However, more than half (59 per cent) of the same CFOs say the employee ended up leaving the company.

Extending counteroffers appears to be common practice in Singaporean businesses as one in three (30 per cent) CFOs apply this practice ‘often’, more than four in 10 (42 per cent) ‘sometimes’ and five per cent ‘always’. Less than one in five (18 per cent) say they ‘rarely’ make a counteroffer and merely five per cent say they have ‘never’ extended one.

However, further acknowledging the ineffectiveness of counteroffers, almost six in 10 (59 per cent)  business leaders who have made a counteroffer indicate the employee ended up leaving the company, with 20 per cent saying the staff member stayed less than a year, 22 per cent citing the employee stayed for over a year, and 9 per cent saying they stayed less than six months. 

“Even though extending a counteroffer can be an immediate reaction to a top employee resigning, offering a financial incentive to remain with the company is just delaying the inevitable as oftentimes the reason why they want to leave the company goes beyond purely financial reasons,” comments Matthieu Imbert-Bouchard, managing director at Robert Half Singapore. “Even if the counteroffer is accepted, a higher salary does not always equal better performance and stronger loyalty. Employers would be better placed to withhold a counteroffer and immediately start the hiring process to replace them.” 


Cultural fit is the main driver for 60 per cent of CFOs who have made a counteroffer as the employee fits in well with the company and team. More than half (59 per cent) cite the desire to retain knowledge within the company as one of the main reasons for making a counteroffer, while 57 per cent point to the additional costs related to the hiring, onboarding and the professional development process. 

“Not only are counteroffers ineffective in retaining employees for the long-term, they can also set a negative precedent for employers as it gives an indication to staff that threatening to resign is a successful way to receive a pay rise, all whilst creating rumours of favouritism thereby undermining staff morale,” notes Matthieu. “A better approach is to have a blanket policy to not extend counteroffers to resigning employees as it’s not an effective, nor a cost-saving staff retention measure.

“Instead of reacting when an employee decides to resign, Singaporean employers need to take a proactive approach to their staff retention initiatives to avoid staff turnover,” he says. “Knowing what drives staff members and taking appropriate measures, as well as regularly reviewing salaries should be key elements of any company’s staff retention policy.”



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