The End of the Counteroffer? Why Strategic Retention Is Replacing Quick Fixes

In an employment market defined by transparency and shifting priorities, counteroffers are losing their appeal. Data from 2024 reveals that while 63% of employers increased salaries to fill roles, 57% chose not to make counteroffers to resigning employees—a five percent rise from the previous year. This trend marks a broader shift towards proactive retention and long-term engagement over reactive responses.


Kaajal Khelawan, HR Manager and Operations Lead, explains, "Employers are shifting away from making reactive offers and focusing more on proactive retention." Rather than scrambling to retain staff once they hand in their resignation, more businesses are investing in the experience and growth of their current teams.


"If an employee has chosen to leave, you need to let them go."


Khelawan is direct about the limitations of counteroffers. "They don't work. They're a band-aid solution," she says. Most employees who accept counteroffers end up leaving within six to twelve months anyway. More critically, such offers can lead to pay inequality, damaging morale and creating internal tension when colleagues learn about unequal compensation.


With growing emphasis on pay transparency, businesses are increasingly aware of how last-minute salary hikes may erode trust. As organisations strive to ensure fairness in pay structures, counteroffers become a liability rather than a lifeline.


Juma Mrisho, Talent Acquisition Business Partner, agrees. He links the decline in counteroffers to deeper structural shifts: "Reactive offers are seen as a short-term fix that doesn't acknowledge the deeper issue within an organisation." He notes that companies are now prioritising long-term strategies such as employee engagement, leadership development, and cultural alignment.


Mrisho also challenges the assumption that salary alone is the reason people resign. "The idea that a salary increase will solve the issue of someone leaving is a misconception. People are also leaving due to cultural or leadership issues. A counteroffer won’t fix that."


The trend is clear: businesses are becoming more strategic with pay and retention. Rather than relying on quick fixes, they are creating environments where employees feel valued, supported, and motivated to stay.


Khelawan concludes, "The goal is to create workplaces where employees don't want to leave, rather than scrambling to keep them once they've resigned."


As we look ahead, the decline in counteroffers suggests that employers across Australia and New Zealand are embracing a more considered, people-first approach to talent management—one that values foresight over quick fixes and stability over short-term wins.


Get in touch

Kaajal Khelawan • June 3, 2025

Find out more by contacting one of our specialisat recruitment consultants across Australia, New Zealand, and the United Kingdom.

Contact us

Share this article

Useful links

Search for jobs today

Got a vacancy?

What's happening in the market?

How do I prepare for my job interview?

Share this article

Recent Insights

By Claire McNab May 26, 2024
In today's rapidly changing world, the call for environmental responsibility is louder than ever. With climate change looming as a critical global challenge, businesses are increasingly under pressure to play their part in mitigating its effects. One of the most significant ways they can contribute is by taking accountability for their sustainability practices, particularly in reducing carbon emissions.
By Esha Nischol May 19, 2024
In today's rapidly evolving landscape, automation is reshaping industries and transforming the way we work. While automation offers numerous benefits, including increased efficiency and productivity, it also presents challenges and uncertainties for the workforce. Understanding the opportunities and challenges of automation on employment is crucial for individuals and organizations alike as we navigate the future of work.
By Hamish Lamberton May 15, 2024
In recent years, the rise of remote work has revolutionized the way companies approach recruitment. With advancements in technology and a growing acceptance of virtual communication tools, many organizations are now embracing remote recruitment strategies to attract and hire top talent. In this blog post, we'll explore how companies are adapting to virtual hiring processes and the strategies they're employing to succeed in this new era of recruitment. One of the key challenges of remote recruitment is creating meaningful connections with candidates without the benefit of face-to-face interactions. To overcome this obstacle, companies are leveraging video conferencing platforms to conduct virtual interviews and assessments. These tools allow recruiters to assess candidates' communication skills, professionalism, and cultural fit, all while providing a more personal touch than traditional phone interviews. In addition to video interviews, companies are also utilizing virtual recruitment events to engage with candidates and showcase their employer brand. Virtual career fairs, networking sessions, and informational webinars allow companies to connect with a broader pool of candidates regardless of geographic location. By hosting these events online, companies can reach candidates who may not have been able to attend in-person events, thereby expanding their talent pool and increasing diversity. Another important aspect of remote recruitment is the use of technology to streamline the hiring process. Applicant tracking systems (ATS) and recruitment software help companies manage job postings, track candidate applications, and collaborate with hiring teams more efficiently. These tools automate repetitive tasks, such as resume screening and scheduling interviews, freeing up recruiters to focus on building relationships with candidates and making strategic hiring decisions. Furthermore, companies are investing in employer branding initiatives to differentiate themselves in a competitive talent market. Through social media, company blogs, and virtual office tours, organizations can showcase their company culture, values, and employee benefits to prospective candidates. By highlighting their unique selling points and demonstrating their commitment to employee satisfaction, companies can attract top talent and create a positive candidate experience. Finally, remote recruitment requires a strong emphasis on communication and collaboration among hiring teams. With team members working from different locations, it's essential to establish clear channels of communication and set expectations for roles and responsibilities. Regular check-ins, status updates, and feedback sessions ensure that everyone is aligned and working towards common hiring goals. In conclusion, remote recruitment strategies are becoming increasingly essential for companies looking to stay competitive in today's digital age. By embracing virtual hiring processes, leveraging technology, and prioritizing communication and collaboration, organizations can attract and hire top talent regardless of geographic location. As remote work continues to evolve, companies that adapt and innovate in their recruitment strategies will be best positioned to succeed in the future of work.