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Financial inducements to stay put

Thinking of finding a new job? Have a little something to take your mind off it.

Australia’s financial services skills shortage is encouraging banks to offer tasty ‘buyback’ packages to keep stellar performers who threaten to defect.

Anthony Ayers, principal consultant at Sydney-based Chandler, says the most common buybacks (AKA ‘counter-offer’) involve matching money – but adds they may also encompass anything from offering additional education, an offshore secondment, a promotion or a guaranteed bonus.

The phenomenon is liable to bump up your bank balance: “The biggest increase we have witnessed involved a stockbroking firm where a star salesperson was allocated a significant amount of equity to remain with the firm,” notes Ayers. “On a couple of occasions we have seen salaries doubled.”

On the flipside, a buyback can prove longer-term career suicide. John Coles, CEO of Executive Group International, points out that employees granted a buyback are not likely to survive with a current employer for long: “Normally [the employee] will drift off. Once they’ve made the decision to leave, the link of trust is broken.”

Coles also warns that being bought back can create resentment with fellow employees: “It’s much frowned upon in the industry,” he says.

Comments (1)

  1. Interestingly, buyback or counter-offer is in a manner shutting the stable door once the horse has bolted. It is unfortunate that organizations miss the early signs which normally create a sequence of blips on the defection radar screen. Is it the lack of competitive leadership skills, silos, sheer lack of communication or other similar deficiency that create management “misses” of the signs leading to defection.

    Do these managers speculate that money is the only incentive to retain? Wake up! Money/shares form part of satisfactory incentives. Today, it is also about work-life balance, qualitative progression and stimulation of the intellect – how many organizations genuinely create these avenues?

    Acknowledged that we are currently having a skills shortage in financial services, overseas defection, hence we are losing Australian talent and expertise to the global marketplace (lucky for them) and not so lucky for our industries. For long term sustainability and growth young Australia must retain her intellectual capital, not just within organizations but within the continent. Preventative and early detection is the key, so shall we say, focus on the “why” not the “when” staff move on. Indeed, one needs to let a question mark hang on what’s taken for granted.

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