Counteroffers: A temporary fix for long-term retention issues?

Counteroffers are increasingly being used as a common retention tactic in today’s competitive hiring landscape, yet their long-term effectiveness is under scrutiny.

The 2026 Robert Half Salary Guide has revealed that 85 per cent of Australian employers extended a counteroffer to employees with external job offers in the past year.

Despite these efforts, 32 per cent of those employees still left within 12 months and seven per cent declined the counteroffer, raising doubts about whether counteroffers are a long-term solution or just a temporary fix.

Only six per cent of employers said that they don’t offer counteroffers and nine per cent haven’t encountered the need to extend one in the last 12 months.

It was shown that counteroffers continued to play a prominent role in employee retention strategies, particularly in a competitive hiring market.

The largest proportion of employers (39 per cent) viewed counteroffers as a valuable tool for retaining top talent when competition for skilled professionals is high.

These organisations saw counteroffers as an effective way to prevent the loss of key employees and maintain business continuity.

A further 28 per cent believed counteroffers are a necessary tactic driven by ongoing wage competition.

However, not all organisations saw counteroffers as a sustainable solution.

One in five employers considered them to be a short-term fix that rarely addresses the underlying reasons employees choose to leave, such as career development opportunities, workplace culture, or job satisfaction.

Meanwhile, 11 per cent of employers said that they avoided making counteroffers altogether, suggesting a preference for focusing on broader retention strategies rather than responding to resignation decisions with salary increases or incentives.

Only two per cent of employers reported being unsure or having no formal stance on the use of counteroffers, which indicated that most organisations have established views and practices regarding their role in employee retention.

Director at Robert Half, Nicole Gorton, addressed the fact that counteroffers can be effective in the short term, but salary alone is rarely enough to secure long-term employee commitment.

“Money alone isn’t enough to keep workers from leaving, as deeper factors like career progression, culture, and engagement are at play,” Gorton added.

“An employee's decision to explore external opportunities is often a signal that they have already disengaged to some degree.

“By the time a resignation is submitted, trust, motivation, or confidence in their future with the organisation may have been eroding for months.

“As a result, even when a counteroffer is accepted, there is no guarantee the employee will remain committed over the longer term.

“The most effective organisations are shifting toward long-term solutions like development pathways, regular salary reviews, and clear communication to build loyalty before employees consider leaving.”

When asked which approach their organisation prioritises, 41 per cent said proactive retention strategies, including career development, salary reviews, and engagement initiatives, to mitigate resignation risks.

In contrast, 17 per cent adopt a reactive stance by relying on counteroffers, while 35 per cent employ a hybrid approach tailored to specific circumstances.

“While it is impossible to stop all resignations, employers are finding that proactive retention strategies deliver better results than reactive counteroffers,” Gorton said.

“Regular career development conversations, competitive remuneration reviews, meaningful recognition, flexible work arrangements, and strong leadership can help identify and address concerns before employees begin looking elsewhere.”

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