UK firms counter higher offers to retain staff
LONDON, UNITED KINGDOM — A recent survey by the Chartered Institute of Personnel and Development (CIPD) reveals that 40% of employers countered higher-paying offers from competitors to retain their staff in the past year.
Many anticipate repeating counteroffers out of 2,000 surveyed businesses, responding to the UK’s bustling job market with over a million open positions.
The data shows 38% matched their rival’s offer, while 40% outbid them. Consequently, companies are gearing up for a potential 5% pay rise in the forthcoming year.
Although this is the first CIPD survey discussing counteroffers, they predict its popularity will grow. Despite a drop in UK job vacancies to 1,034,000 between April and June, it’s still an increase of 232,000 since the start of 2020.
On the downside, inflation has eaten into wages, causing a 0.8% real-term decrease.
With salaries surging, the Bank of England and the government expressed concerns about further inflation.
Professor Hilary Ingham from the University of Lancaster highlighted that private sector pay deals hover around 8%, triggering potential inflationary spirals.
Amid rising mortgage rates, Mace Group’s CEO, Mark Reynolds, pointed out the challenges of increasing wages.
Alternatively, Jon Boys, CIPD senior economist, recommends enhancing employee benefits, such as flexible schedules or improved pension plans, rather than merely hiking salaries.
Notably, the CIPD survey also found that just one in five firms had a clear policy on when to make counteroffers, cautioning that inconsistency might lead to pay gaps and fairness issues.
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