Companies spread an array of counteroffers to win over talent

A mid-level executive working in the analytics team of a multinational company recently resigned to join an ecommerce firm due to a lucrative offer, a counteroffer and a sweet offer to counter the counter.

People aware of the development said that he has joined the e-commerce firm as a vice-president after rejecting a counteroffer of a promotion and a nearly 40% pay hike from his current employer.

A team leader from the multinational said, “In monetary terms, executive salaries jumped almost 100%… the e-commerce company has also promised Esop.” “We couldn’t compete with that offer.”

India Inc, grappling with great resignations after the Covid-19 pandemic, is now embroiled in salary negotiations, offers and counteroffers to acquire and retain talent amid a 21% attrition rate, the highest in two decades .

Experts said many more workers are bargaining hard and playing against their current employers and potential each other to get the best deal.

According to research conducted by professional services firm Aon India, 90% of employees who resigned in the recent past were offered lucrative counter offers by their current employers, but only 35% of them stayed back.

Research says that about 20% of people who get a counter offer go back to the company offering the job and even squeeze out a “counter-counter” offer before joining. .

Rupank Choudhary, Partner, HCS Aon India, said, “India is experiencing the highest number of 21% layoffs in the last two decades, and many companies are using counteroffers to deter employees who are clearly are spoiled for choice.” “On the other hand, employees, especially at the middle and senior levels, are using offers and resulting counteroffers to better position their current salaries in the external job market.”

As per the AON report, companies pay an average of 10-20% increase over competitive offers to attract or retain talent.

Research shows that 38.8% of companies had to jump up to 10% on counteroffers, while 29.8% of companies had to give 20% on counteroffers and in about 2-3% of cases. To increase the salary by 50% over and above the counteroffer.

Anandorup Ghosh, partner, Deloitte India, said, “There is a lot of money available in the system at the moment and most of the offers and counter offers are a result of this.”

In some cases, experts said, the motivation may not be money alone.

Originally published at Pen 18