As recruitment rates rise and talent remains in short supply, more foreign banks in China are issuing counter offers to retain resigning staff. But these offers should be treated with caution, suggest recruiters.
Counter offers in China often take the form of pay rises – typically 10 to 15 per cent above the offer made by the new employer – as well as improved internal rankings, better job titles, or verbal promises of future opportunities, says Rocky Cheung, managing director China, Global Associates.
Cheung thinks about half of all counter offers are successful. “Employers see it as more cost effective to retain key performers rather than recruit new ones, taking into account the replacement costs.”
Chinese employees sometimes use new job offers to test current employers. They are seeking emotional feedback and recognition for hard work that may have been overlooked, says Michael Wright, founder and managing director of Idealpeople.
“Smarter employers will spend time counseling the employee, identifying the reasons for discontentment, and addressing problems, where possible, by shifting their responsibility, reporting line, or job scope,” he adds.
Although counter offers appear to offer short term gains, they can create a lot of problems in the long run. “Counter offers should be designed very carefully not to cause resentment from other staff,” says Cheung.
He also suggests employers should avoid stepping into a bidding war over a candidate because it may affect that person’s loyalty and professionalism.
Wright says that from a job seeker’s perspective “there are many reasons not to accept a counter offer. By doing so, you risk colleague resentment, missing out on future pay reviews, creating a perception of not being loyal, and so on”.
Cheung adds that candidates should carefully assess the career development opportunity, corporate culture and package before accepting an offer.