Counter-offers – pay rises proposed by desperate bosses to employees who announce they are resigning for a new job – are now rife in the financial service’s job market, according to specialist recruiter Randstad Finance & Professional.
In a typical year in the middle of the economic cycle, one in every five finance professionals threatening to resign is counter-offered. Currently, three-quarters of all finance staff are receiving counter-offers.
Tara Ricks, MD Randstad Financial & Professional, said: “While counter-offers have been a feature of the City hiring process for decades they've never been this prevalent. Even in early 2008, when risk professionals were rarer than hen’s teeth, only 40% of risk professionals were getting buybacks. This is a candidate-driven market and employers are doing all they can to hang on to key staff.
"Where this used to be the reserve of American investment banks, counter-offers are now being made to audit and tax professionals. Newly qualified accountants are also getting a lot. As the increased importance of human capital and the scarcity of high flyers has dawned on the sectors biggest employers, there has been a profound change in their willingness to fight to retain their A-Players.
"Not only are the banks and the large professional services firms desperate to recruit, but they are also prepared to scrap to hold onto the right people. The end result is counter-offers have increased in both frequency and scale.”
counter-offers are expensive – and they don't necessarily work.
The average pay increase that finance professional would need to turn down a new job offer is 16% of their existing salary – the equivalent of £6,567 now that the average national wage for a chartered and certified accountant stands at £41,011. But with Assistant Treasurers at FTSE100 (or equivalent private and non-listed groups) earning up to £170,000 in London and regional heads of compliance earning up to £230,000 counter-offers can cost financial services employers £36,800.