As India Inc. battles resignations and high attrition, several companies are making lucrative offers, counteroffers to employees to make them stay. A research by professional services firm Aon India has found that about 90 per cent of employees who quit in recent times were offered attractive counteroffers by their existing employers.
It added that about only 35 per cent of the employees stayed back. Moreover, nearly 20 per cent of those who received the counteroffer went back and also managed to get a “counter-counter” offer before joining.
A similar thing happened to a mid-level executive working in the analytics team of a multinational who recently left the firm to join an ecommerce firm. He was offered a handsome offer, a counteroffer, and another offer to counter it. However, he joined the e-commerce as a vice president after rejecting the counteroffer, Economic Times quoted people aware of the development as saying.
“To put it in monetary terms, the executive’s salary jumped by almost 100 per cent…the ecommerce company has even promised Esop,” said a team leader at the India Inc. which is now engaged in making salary negotiations, offers and counteroffers to retain talent. This comes amid a 21 per cent attrition rate, the highest in two decades.
Attrition in India
“India is experiencing the highest attrition in the last two decades at 21 per cent, and many companies are using counteroffers as a means to stop employees who are clearly spoilt for choice,” said Roopank Chaudhary, partner at HCS Aon India.
Employees, on the other hand, especially at mid and senior level, have been using offers and the resultant counteroffers to better position their existing salaries to the external job market.
The Aon report pointed out that companies hand out a 10-20 per cent hike on competing offers to attract on an average. Around 38.8 per cent companies had to offer a 10 per cent raise on the counteroffer, while 29.8 per cent had to offer 20 per cent over the counteroffer.
Meanwhile, nearly 2-3 per cent of the companies had to offer a 50 per cent hike over and above the counteroffer. “There is a lot of money that is available in the system currently and most offers and counteroffers are a result of this,” said Anandorup Ghose, partner at Deloitte India.
Ghose highlighted two other factors that are contributing to attrition. “One is a fundamental sense of boredom as people are only left with the core of a job, and secondly, due to employees working remotely, the company’s culture or the pride attached to a job is limited to a logo on their laptops,” he explained.
