While Australia is currently in a tight labour market should you really bother with a counter offer when an employee already has one foot out the door?

This week Hayes Information Technology recruiters released their annual salary survey. For many, it’s depressing to see what the so-called average peer is earning on a so-called greener pasture. For others, it’s a point to state their market self-importance and reflecting salary to their boss, which can result, depending on your situation, in either:

a) 10% more happiness inside your next pay packet
b) A reminder of where you sit in the company hierarchy structure
c) That glare and subsequent “thanks, we’ll take that on board during the next review process…in 2008” reply.

While many employees are looking to pimp their wares to the highest bidder in this tight Australian labour market the Hayes Salary survey has indicated that employers shouldn’t pander to difficult subordinates who are playing hardball and expecting large counter offers to stay in their current job because it won’t keep them around.

The salary survey says that while almost half of all employers counter offer resigning staff, the majority fail.

Of the 1,700 employers surveyed 48 percent said they counter offer staff, but of that amount 80 percent still left the business within 12 months. Hayes broke the figures up more by stating that 42 percent stayed less than 3 months, and 8 percent stayed between 3 and 12 months. Just 20 percent of those counter offered remained within the business longer than 12 months.

Peter Noblet, regional director of Hays Information Technology hits the nail on the head when he said in a statement regarding the find.

“…This is rarely a successful retention strategy because the employee already has several other offers on the table. They’ve applied for and seriously considered other vacancies so their decision to leave the company was made long ago.

“Even if a counter offer is accepted, we still caution concern as the original motivation for looking for another role remains, often leading to another resignation. This motivation will not be solved simply through counter-offering a slight increase in salary. Unless the issues are addressed, the employee is likely to still seek a better offer elsewhere.”

The untold impact of unhappy employees getting counter offers can have a highly negative impact on existing happy employees too. The risk lies when the unhappy employee lets their peers know of how their counter offer negotiation process is going. While businesses expect confidentiality, the reality is that people talk.

The happy employee who does their job sees that the employee who throws their toys out of the pram is offered more money than what they’re on, which can result in more unhappy employees and demotivates those trying to just do their job.

It’s a somewhat difficult topic, but companies have more to lose than gain by offering the unhappy and money grabbing few extra money just to keep them happy for a few months.

Of course, it isn’t always employees who are difficult. If there is a large amount of turnover then employers should be reflecting on common reasons why people are leaving and one of them may well be short changing their staff or not providing a happy work environment.

As media whore Gordon Sumner once famously sang “free, free, set them free”.

To view the Hays Salary Survey, visit www.hays.com.au/salary