Fancy a pay rise? Desperate channel firms dishing out huge counter-offers

As channel firms struggle to replace leavers, money-spinning counter-offers of up to 25 per cent are being used to retain wantaway staff

Counter-offers in the channel reached an all-time high this year, as firms are continuing to find it challenging to replace departing staff.

Marc Sumner, managing director of Robertson Sumner, told CRN that the average number of days a channel firm has a role open has risen from 32 to 67 in the last 12 months.

"It's now becoming an increasing problem for channel firms to plan expansion and keep key staff within existing salary guidelines," he said.

"Senior management know that candidates will be extremely hard to replace so are making counter-offers that are sometimes rising to 25 per cent of the staff member's current basic salary."

Sumner said normally a counter-offer would be around 10 to 12 per cent of the current basic salary, but recently companies have been making 22 to 25 per cent offers. Candidates are then put in a very difficult position and around 50 per cent are opting to stay.

"With open headcount already a struggle, channel firms are starting to panic about their own staff and are countering most employees who want to leave," said Sumner.

"This is a very dangerous game, as candidates still continue to leverage other offers after they have been countered. It is well documented that an individual's sole motive for leaving will not be money.

"Once they get the pay rise, they will probably continue to look for a new role but now with the added ammunition of being on more money. Candidates in the channel know they are in demand, so have become very bullish over salaries and their expectations and demands," he said.

Sumner said this mainly happens with sales roles, predominantly account directors and senior account directors.

Asked what can be done to prevent this situation, Sumner said it was about channel firms getting the basics right.

"Ask at the interview stage about counter-offers and see if money is a key driver for moving. Make sure the new employee has solid reasons for looking for a move and to join your firm.

"Also, stop your company from countering continually by creating succession plans internally, so no one feels indispensable and can hold the company to ransom.

"Finally, culture is key of course, but if an employee has started looking elsewhere they normally leave within six months anyway even after accepting a counter-offer," added Sumner.