Offering to pay a person more money to stay at your firm doesn't work in the long term. Photo/Kenny Rodger.
Offering to pay a person more money to stay at your firm doesn't work in the long term. Photo/Kenny Rodger.
Offering more money to an employee to stop another firm poaching them doesn't work in the long term, research has revealed.
Recruitment firm Robert Half found that nearly 90 per cent of chief financial officers had made a counter-offer to employees in a bid to retain them.
But nearly twothirds of those who made an offer said the employee ended up leaving the company anyway.
Of those surveyed 23 per cent said the employee left within six months, a further 27 per cent said the employee stayed less than a year and only 14 per cent said the staff member stayed more than a year.
Megan Alexander, general manager Robert Half Australia, said the reasons why people resigned often went far beyond their salary.
"For an employer to offer a higher salary as an incentive to stay with the company often just delays the inevitable.
"Counter-offers rarely prove to be a long-term solution for staff retention."
The main reasons employers cited for making a counter-offer was the cost of replacing an employee and the desire to retain the person's knowledge with 58 per cent citing these as reasons why they made an offer.
A further 35 per cent said it was because the person fitted in well with the company and the team.
Alexander said high turnover was a costly issue for many companies.
"Regularly reviewing salary levels to make sure they're in line with industry standards can help companies ensure they're paying their staff competitively."
But she said businesses needed to look beyond purely financial incentives to ensure they kept hold of good employees.
"A strong company culture and positive working environment are key methods to avoid staff turnover, as well as offering workplace flexibility such as the option to work from home," Alexander added.
The survey questioned 100 New Zealand chief financial officers.
