IT counter-offers 'too little, too late', reveals Randstad survey

68% say counter-offers are a belated admission from employers that they have been underpaying an employee

Counter-offers to retain IT staff are “too little, too late”, according to a survey of technology professionals by recruiter Randstad Technologies.

More than a fifth (21%) of IT workers questioned said they had been counter-offered when they last moved jobs, compared with an average of 8% across the UK.

Despite this, 68% said they viewed counter-offers as a belated admission from employers that they have been unfairly underpaying employees.

IT workers said they would need a pay rise of almost a fifth (18%) of their salary to tempt them to stay. 

The average salary of a full-time IT and telecoms director is close to £87,000, according to the Office for National Statistics Annual Survey of Hours and Earnings report, which would mean a salary of more than £102,000 per year if a counter-offer was successful.

Randstad Technologies managing director Ruth Jacobs said the accelerating technology sector is running on limited fuel and a lack of skilled talent is pushing up the prevalence of counter-offers in the technology world.

“A shortage of well-qualified project managers and developers is catalysing the problem, and counter-offers have spread all the way from the City to Silicon Roundabout," he said.

"But in trying to pull themselves out of a talent vacuum, counter-offering employers are digging themselves into a bigger hole by admitting the extent to which they have been underpaying their staff.

“In most cases, this belated recognition is a main driver behind the employee leaving in the first place. By the time a counter-offer is put on the table, the employee has already made the decision to move on, has already mentally checked out, and the offer comes as too little, too late.”

Counter-offer does not guarantee long-term stay

However, the survey revealed a counter-offer acceptance does not guarantee the employee will stay long term, with 53% of tech professionals admitting they would leave within a year of accepting. This is compared with an average of 37% for all UK workers. Furthermore, 13% said they would leave within three months of accepting a counter-offer.

“They say that everything has a price, and for tech workers the price they must be offered to stay in a job they are ready to leave is sky-high," said Jacob.

"But counter-offers can’t buy loyalty. Many workers may take the money offered, but the majority will still leave an organisation within a year. Switching companies is nearly always a deep-rooted decision. It comes down to opportunity, ethics and the working environment – all of which can’t be fulfilled by a simple pay rise.

Many workers may take the money offered, but the majority but will still leave an organisation within a year

Ruth Jacobs, Randstad Technologies

“And with the meaty sums involved it can be more worthwhile to divert counter-offer cash into fostering and training new talent, and making the company a more attractive place to work. Many young startups already recognise the importance of encouraging a fun and vibrant office, and this ethos needs to be adopted by larger firms too.”

One in seven (14%) aged between 25 and 44 said they have been given a counter-offer, whereas fewer than 1% of those aged between 18 and 24 were offered one. In addition, only 6% of employees more than 55-years-old said they had received a counter-offer, while only 4% of those aged between 45 and 54 said the same.

“The supply of managerial talent is limited," said Jacobs. "The number of people aged between 25 and 44 – the demographic segment that will supply companies with their future leaders – is declining as a percentage of the population. That’s reflected in the increased prevalence of counter-offers being made to that age group.”

The survey also revealed women are less likely to receive a counter-offer than men. A total of 9% of men admitted to being counter-offered when they last moved jobs, whereas only 7% of women said the same.

“The discrepancy between the sexes is more disturbing as it’s a much more subtle form of sexism than simply hiring more men than women," said Jacobs. 

"The fact that employers seem keener to keep hold of men more than women is worrying – that sort of thing should have died out in the 1950s.”

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