He has joined the ecommerce firm as a vice president after rejecting a counteroffer of a promotion and about 40% salary hike from his existing employer, people aware of the development said.
“To put it in monetary terms, the executive’s salary jumped almost 100%…the ecommerce company has even promised Esop,” said a team leader at the multinational. “We couldn’t compete with that offer.”
India Inc, battling the great resignation in the aftermath of Covid-19 pandemic, is now embroiled in salary negotiations, offers and counteroffers to get and retain talent amid a 21% attrition rate, the highest in two decades.
And many employees are bargaining hard and playing their existing employer and the prospective one against each other to bag the best deal, experts said.
According to research done by professional services firm Aon India, as many as 90% of employees who resigned in recent times were offered lucrative counteroffer by their existing employers, but only 35% of them stayed back.
Almost 20% of the people who get a counteroffer go back to the job-offering company and even manage to squeeze a “counter-counter” offer before joining there, the research said.
“India is experiencing the highest attrition in the last two decades at 21%, 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.”
As per Aon report, on an average, firms give out 10-20% hike on competing offers to attract or retain talent.
The research shows that 38.8% of companies had to give up to a 10% jump on the counteroffer, while 29.8% of the companies had to dole out 20% over the counteroffer, and in about 2-3% of the cases, companies had to increase the salary by 50% 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.
In some cases, experts said, the motivation may not be money alone.