Counter offers fail to keep IT staff

As IT salaries continue to spiral upwards smaller organisations are counter offering staff more frequently, pushing up salaries even further as they compete with their larger competitors for staff, says Natasha Edwards, associate director technology division at Robert Walters.

Commenting on Robert Walters' annual global salary report, which revealed a marked rise in counter offers, Edwards said companies who tried to retain employees with offers of more money were often understaffed and employees underpaid.

"Counter-offers are particularly common in organisations where job vacancies haven't been filled because employers are too picky about who they want to hire or don't want to pay decent rates."

The likely hood of a counter offer succeeding in the long term was small, she added, pointing out that eight out of ten candidates who accepted more money to remain with their current employer would be job hunting again within three to six months.

Mark Lampson, Director, Ashdown Consulting IT recruitment said counter offers were a normal "knee-jerk" reaction to losing a decent employee in a tight market but it was rarely in the candidate's interest to stay.

"We always try to educate candidates on the downside of accepting a counter offer and how it is going to affect their future employment with their current employer," he explained.

"For instance they might be overlooked for the next promotion or miss out on a bonus or moved sideways instead of upwards because the employer will often have a slight doubt over their loyalty."

Lampson also agreed that most candidates who chose to remain with their current employer for more money usually ended up leaving soon after.

"Three or four months ago we had a test consultant who was offered an extra $5,500 on their base salary by a potential employer. They were then counter offered by their current employer - I was led it to believe it was $7000 plus - and they accepted it.

"That particular candidate is now back in discussion with us regarding other opportunities because he felt he didn't make the right choice," Lampson said

Using a counter-offer as a means to get a pay rise was also a no no, he said, as employees would still have to deal with their employer's "niggling doubt" over their loyalty.

Edwards said it was also rare that a counter offer could be used as leverage to raise a potential employer's offer.

Very few prospective employers want to get involved a bidding war," she explained.

"Candidates are much better off to negotiate their offer up on the basis of what another prospective employer has offered."

"In areas of the IT industry where there are a shortage of people with  specific skills including software development and solution and technical architecture, candidates can command higher salaries," she said.

Dominic Roberts, director Inspire Recruitment, and executive search said most counter offers failed because IT professionals chose to move companies for reasons other than money.

"It's more about work/life balance and a lack of career progression in their current job or they're just bored and want other projects," Roberts explained.

"So, if they're ready to move a counter-offer isn't going to make much difference and if employers did a better job at retaining their staff in the first place, they wouldn't have to counter offer."

By Zsa-Zsa Bowie Wilson, CareerOne.com.au