Return of Counter-Offer will cost Irish companies €20m in 2011
- 1 in 5 resigning accountants now offered rise to stay in jobs
- Average rise offered to resigning accountants rises to 13%
- 2 out of every 3 top level accountants are being counter-offered
Substantial salary rises offered by employers to accountants who tell them they are resigning to take a new job will cost Irish companies €20m in 2011, according to research by accountancy and finance recruiter Marks Sattin Ireland.
1 in every 5 finance workers in the Republic of Ireland are being counter-offered now, compared to just one in 10 last year.
The average rise made in a counter-offer has risen from 4% this time last year, to 13% in 2011.
With average wages in the sector standing at €110,000 and employee turnover standing at around 10%, Marks Sattin says the cost of offering wage rises of 13% to this proportion of Ireland’s 65,000 accountants is €20,280,000 every year.
Dan McKeown, associate director Marks Sattin Ireland says, “The number of counter-offers has rocketed this year and this has led to huge unplanned expenditure for companies. Big employers have been caught out by how quickly the market for finance professionals has recovered. At the moment, 22% of accountants are being counter-offered when they tell their employers that they are jumping ship, up from 12% last year – and that number is still rising.”
“The size of these offers should also make payroll controllers think hard about any future decisions to freeze wages as the result is rapidly spiralling costs that reward employees who get itchy-feet and which companies can do little to control. It may be that the rise of the counter-offer will fundamentally change the way finance functions negotiate wages. For now the power rests firmly with workers who have had to tolerate frozen wages during the recession. That may prove very unpopular with the 13.4% of the population who are currently unemployed.”
The phenomenon is being experienced in both practice and industry. Counter-offers are particularly prevalent in insurance and reinsurance.
Dan McKeown says “The insurance and reinsurance industries are leading the way in counter-offer wage inflation, but accountants working in tax, risk and compliance are also enjoying bidding wars for their talent.”
The Capital
In Dublin, counter-offers are even more frequent and involve sums that are twice as large. 1 out of every 3 candidates are now being offered more money to stay in their roles, and counter-offers of 15% of base salary are common. At managerial and directorial level, 2 out of every 3 candidates are counter offered.
Dan McKeown says, “Firms in Dublin are prepared to spend significantly more money maintaining the quality of their workforce than the rest of the country - and this may be an indicator of a two-tier recovery in the economy. While the public sector and construction sectors are temporarily dead,, international companies have opened substantial regional headquarters here, following in the footsteps of the likes of Pfizer, Google, and Cadbury's. This is troubling news for regional companies trying to prevent an exodus of talent to the capital.”
International Comparison
But comparisons with other countries show that the increase in the scale and volume of counter-offers in Ireland is not keeping pace with the rest of the world. While average counter-offers in the UK are 15%, those in Singapore have now hit 20% of salary.
Dan McKeown says, “This trend is particularly pertinent in Ireland because we have such an international workforce – there are over 6,000 accountants registered with UK body CIMA working here alone. These people were originally attracted to Ireland by the money. So, despite the extra cash being offered, there are more attractive offers being made elsewhere, so if the large multinationals moving to Dublin don’t poach them, we can expect these highly skilled professionals – and their tax Euros – to depart over the next twelve months.”
