The Rise of the Counter-Offer

Salaries before and after the pandemic

Our last Rewards, Attitudes and Salary Report 2020-2021 explored the changing attitudes of real estate professionals and the impact of salaries before and after the pandemic.

We found that in the UK, for example, since 2019, the median salary for 2020 to 2021 increased by £2,000. But due to economic setbacks, most real estate salaries in the UK have remained unchanged since the start of the pandemic, with just 13% receiving a pay rise.

Meanwhile, 62% of bonuses — which are often an important part of remuneration packages — were negatively impacted by the Covid-19 outbreak.

Motivations behind making and accepting counter-offers

Counter-offers are often frustrating for both the existing and potential new employer, especially when forced to compete with a very generous pay offer or the promise of a promotion.

Whether an employer accepts the original offer or counter-offer depends on their motivations and end goal. If it’s to earn more money, they are likely to accept a pay rise from their existing employer and remain. However, if the company culture or management structure is caused them to reconsider their current role, there’s less chance of them accepting a counter-offer.

The counter-offer may take the form of a pay increase, promotion or improved benefits package. Whichever form it takes, there are many reasons why companies counter-offer. For example:

• Loss of income — A reduction in output because of a vacancy and time to onboard new team members can delay production, services or projects. Retaining existing employees prevents this from happening.
• Cost of recruitment and training — Training can cost between 20% and 40% of their annual salary. When combined with additional loss of time to get a new employee up to speed, a counter-offer can be a far more cost and time effective option than rehiring.
• Pride — No one wants to lose their best employees, especially to their competitors. So, there’s undoubtedly a sense of pride involved in counter-offers and retaining your most talented employees.

Are counter-offers good for business?

A counter-offer can very well work in an employers favour, especially in the short term. It enables companies to retain valuable knowledge and talent when businesses cannot afford to lose either, and protects morale among the rest of the workforce. It also eliminates the cost, time and effort required to recruit, onboard and train a suitable replacement in an increasingly competitive market.

Holding on to employees who feel dissatisfied or undervalued in their work will only prove to be a temporary fix that simply delays the inevitable.

Offering additional employee benefits or even a salary increase may encourage them to stay initially.

However, the reasons they wanted to move on in the first place rarely go away, and they may well eventually leave the company anyway.
There’s also the impact on the wider business to consider. If word spreads that a colleague has secured a pay rise, it could also encourage other employees to ask for an increase. If key team members leave, others may follow suit.

Prevention is better (and more cost-effective) than cure

Salary is just one part of a remuneration package offered to real estate professionals. Commission and bonuses combined with other incentives are key to both attracting and retaining talent.

To minimise staff turnover, companies must look at offering benefits, salaries and career opportunities that are both competitive and consistent with what employees in the industry expect.

There may be occasions when a counter-offer appears to be the only viable solution. But by conducting regular salary reviews, offering flexible working opportunities, providing career development opportunities and creating a healthy and respectful work environment, you’ll be closer to creating the type of workplace where employees feel valued, rewarded and ultimately, motivated to stay.

You’ll also be in a better position to recruit the brightest and best talent if you need to replace a departing employee.

We will be delving deeper into the data to discover exactly where our industry stands and how confident companies are feeling across the different real estate sectors. We will compile the results into an online report to show the average salaries and gauge the views and opinions of those employed across Real Estate Investment and Funds, Real Estate Development, Planning, Architecture and Design, Building and Construction.

These unprecedented times have had a significant impact on our industry, shifting the supply of professional talent in line with increasing demand.

Counter-offers are one of the top challenges facing employers in our industry today. Recruiting the best talent can be difficult at the best of times. But with counter-offers on the table, companies must fight harder for candidates by taking a proactive approach, from offering a competitive salary and benefits package to creating a positive, healthy and respectful work culture.