UK employers turning to counteroffers to retain key staff amid skills shortages

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Image by Alexander Suhorucov via Pexels


A significant proportion of UK employers are turning to counteroffers to retain key staff amid ongoing skills shortages, new research from The Chartered Institute of Personnel and Development (CIPD) shows.

According to the latest CIPD Labour Market Outlook report, 40% of UK employers have made a counteroffer in the past 12 months to employees who are considering leaving to pursue a new opportunity. Of those employers that made a counteroffer, 38% matched the salary of the new job offer and 40% offered even higher remunerations.

Counteroffers are most prevalent in London, with 58% of employers there offering one in the last 12 months, making it the ‘counteroffer capital’ of the UK.

Moreover, the prevalence of counteroffers is likely to increase over the coming year, with a quarter of employers who have used them previously saying they anticipate the need to offer even more in the next 12 months. Just 8% anticipate offering fewer.

Jon Boys, Senior Labour Market Economist, CIPD, commented: “While pay is often the most typical focus of a counteroffer, there are other things employers should consider in making roles more attractive, such as flexible working, additional paid holiday, opportunities for career development, or better pension contributions."

Meanwhile, the same CIPD research reveals that median basic pay rates are expected to increase by 5%, unchanged from the previous two quarters and the joint-highest readings since the survey started in 2012.

A key driver cited by many employers for pay increases was the increase to the National Minimum Wage and National Living Wage, with one in five (18%) saying it has impacted their wage bill to a large extent.


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