Just when employers think they have secured the right candidate, the counteroffer makes an appearance.
A candidate resigns, hands in their notice, and suddenly their current employer responds with a salary increase, promotion, enhanced flexibility, or promises of future progression. What looked like a successful hire can quickly become uncertain.
This trend is not simply returning; it is becoming a growing feature of today’s hiring landscape. Recent CIPD research found that 40% of UK employers have made a counteroffer within the past year, rising to 58% in London, underlining how competitive talent retention remains in the capital.
For employers, the challenge is clear. Talent competition no longer ends when an offer is accepted. In many cases, it continues right up until the candidate’s first day.
Why Are They Rising?
Counteroffers tend to increase when employers are cautious about hiring but determined to retain the talent they already have.
In today’s market, many organisations are carefully managing headcount and recruitment budgets while still facing skills shortages in key areas. When an experienced employee resigns, replacing them can be both expensive and disruptive.
The true cost of replacing an employee extends far beyond salary. Recruitment fees, onboarding, training, lost productivity, management time, and the impact on team performance all add up. Some studies estimate that replacing a senior executive can cost more than twice their annual salary.
Against that backdrop, a pay increase or promotion can appear to be the more cost-effective solution.
The data reflects this trend. Of employers who made a counteroffer, 38% matched the candidate’s external offer, while 40% offered even more. More tellingly, 51% of employers already using the approach reported increasing their use over the past 12 months.
Why Candidates Accept Them
Salary may be the headline factor, but it is rarely the only reason.
Many candidates accept the offer because they are balancing financial considerations with emotional ones. Familiar colleagues, trusted managers, established routines, and concerns about uncertainty can all influence a decision.
For some, resigning triggers conversations that should have happened months earlier. Suddenly, there is a budget available, progression opportunities emerge, and flexibility becomes negotiable.
In a market where many professionals are weighing risk more carefully, staying with a known employer can feel like the safer option.
It is also worth remembering that counteroffers are common. Industry research frequently suggests that around half of employees who resign receive some form of deal from their employer.
The Hidden Risk For Employers
While counteroffers can solve an immediate retention problem, they often fail to address the original reason the employee wanted to leave.
Employees rarely begin job searching because of a single issue. More often, their decision is influenced by a combination of factors including career progression, recognition, leadership, workload, flexibility, or remuneration.
If those concerns remain unresolved, the underlying problem is still there.
This is one reason why many recruitment professionals view counteroffers as a short-term retention tactic rather than a long-term solution. Industry research frequently suggests that a significant proportion of employees who accept a counteroffer still leave within the following 12 months.
There is also a question of trust. Once an employee has resigned, both sides may view the relationship differently. Employers may question commitment, while employees may wonder why action was only taken after they decided to leave.
How Employers Can Reduce The Risk
The most effective way to reduce counteroffers is not through a last-minute salary increase. It is through stronger employee engagement and a better hiring process from the outset.
Employers can reduce the risk by:
โข Having regular conversations about career progression, development, and future aspirations
โข Acting quickly during recruitment to maintain candidate momentum
โข Understanding what genuinely motivates candidates beyond salary alone
โข Keeping candidates engaged between offer acceptance and start date
โข Reviewing retention strategies if counteroffers are becoming a recurring issue
The employers that consistently secure top talent are often those that focus on the entire employee journey rather than relying on last-minute interventions.
What This Means For Employers
Counteroffers are likely to remain a feature of the recruitment landscape as organisations continue to compete for experienced professionals.
However, they are often a symptom rather than a solution. They can indicate that important conversations around pay, progression, recognition, or flexibility happened too late.
For employers, the real question is not whether a counteroffer can be made. It is why the employees wanted to leave in the first place.
At ABL Recruitment, we work closely with employers and candidates throughout the hiring process, helping businesses navigate challenges such as counteroffers, offer declines, and candidate retention. In a competitive market, successful hiring is not simply about securing acceptance. It is about creating opportunities that candidates genuinely want to join and stay for.
Looking to hire? Speak to ABL Recruitment today to discuss your talent needs and discover how we can help you attract and retain the right people for your business.
