Counter-offers are becoming increasingly common in the IT and Technology industry – as employers battling a talent drought desperately try to hold onto talented staff – but most Tech employees see them as ‘too-little, too-late’. 

When asked if they had been counter-offered when they last moved jobs, more than a fifth of Tech and IT professionals reported they had been (21 percent) compared to an average of just 8 percent across the UK, according to specialist recruiter Randstad Technologies. This trend was echoed across the professional sector as counter-offers move from the preserve of the banking sector and into the mainstream: a fifth of Construction & Engineering professionals (21 percent) and more than a sixth of Legal professionals (18 percent) were also counter-offered.

But despite growing in popularity, counter-offers don’t seem to be working. Seven out of ten Tech workers (68 percent) said that they view counter-offers as ‘too-little, too late’ and as a belated admission from employers that they’ve been unfairly underpaying you.Ruth Jacobs, MD of Randstad Technologies, comments: “The accelerating Technology sector is running on limited fuel – and that 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.

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.”

If a counter-offer were to work, Tech workers say that they would need a pay rise of almost a fifth of their salary (18 percent) to tempt them to stay. With the mean average salary of a fulltime IT and Telecoms Director now approaching £87,000[1], a successful counter-offer now means paying more than £102,000 per year. But despite the large sums involved, a counter-offer acceptance is no guarantee an employee will stay long-term. Over half of IT & Tech professionals (53 percent) said that they would leave within a year of accepting a counter-offer – compared to 37 percent of UK workers. One in eight IT & Tech workers (13 percent) said they would leave within three months of accepting a counter-offer.

Ruth Jacobs explains: “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. But counter-offers can’t buy loyalty. Many workers may take the money offered, but the majority but 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. 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 start-ups already recognise the importance of encouraging a fun and vibrant office, and this ethos needs to be adopted by larger firms too.”

Across the UK, workers in the 18-24 age bracket are rarely counter-offered (>1 percent) and the same goes for workers at the other end of their career with only one in 17 (6 percent) of those over 55 reporting they were counter-offered – and just one in 25 (4 percent) of those between 45-54 saying the same.  But it was a different story when Randstad asked those in the 25-44 age bracket.  One in seven (14 percent) said they were counter-offered. Women are also less likely to be counter-offered than men – 9 percent of men were counter-offered when they last moved jobs compared to 7 percent of women.

Ruth Jacobs concludes: “The supply of managerial talent is limited.  The number of twenty five to forty four year olds – 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 discrepancy between the sexes is more disturbing as it’s a much more subtle form of sexism than simply hiring more men than women.  The fact that employers seem keener to keen hold onto men than women is worrying – that sort of thing should have died out in the fifties.”