TL;DR: An employee counteroffer can keep a valued person, but only when it fixes the reason they resigned. Robert Half’s 2026 research found that 32% of Australian employees who received a counteroffer still left within 12 months. Use one rarely, deliberately, and in writing, and put more effort into retention before anyone resigns.

Last updated 11 October 2026.

Key takeaways

• According to Robert Half, 85% of Australian employers extended a counteroffer in the past year to staff holding an outside job offer.
• In the same research, 46% of those employees were still there, while 32% left within 12 months and 7% declined outright.
• A counteroffer built only on money rarely fixes workload, manager, or career problems, which are often the real reasons for leaving.
• Counteroffers can unsettle the rest of the team, especially when the offer is a promotion others expected.
• Gallup found that 52% of employees who quit say their manager or organisation could have kept them.

You will remember “The Great Resignation”. According to the ABS, 9.5% of employed Australians changed jobs in the year to February 2022, the highest rate since 2012, and people were demanding better working environments, more flexibility, better culture, better systems, and more money. By February 2026 the rate had eased to 7.2%. Yet talent still reassesses its options, and one way leaders try to keep staff is an employee counteroffer. But will it cause more harm than good? If someone is ready to move on, is the best decision to wish them well in their next opportunity?

What is an employee counteroffer?

An employee counteroffer is an improved set of employment terms offered to someone who has resigned or says they are about to leave. It might be a pay rise, a promotion with more responsibility, a one-off bonus, equity, more flexible working arrangements, or a move to another team. Its aim is to change the person’s decision before their notice period ends.

Counteroffers usually happen fast. An employee hands in a resignation letter, mentions an offer from a competitor, and the manager has days to respond. That speed is part of the problem, because a decision made under pressure is rarely the best one for either side.

Why do businesses use employee counteroffers?

Businesses use counteroffers because replacing a skilled person is slow, expensive, and risky, especially where the talent pool is small. According to Gallup, replacing an employee costs one-half to two times their annual salary, which Gallup calls a conservative estimate. A counteroffer looks cheaper than that, at least in the moment.

It is also common practice. According to Robert Half’s 2026 research, only 6% of Australian employers say they do not offer counteroffers, and 9% had not needed to make one in the previous year.

Should you use an employee counteroffer?

Use an employee counteroffer only when you know why the person resigned and the offer genuinely fixes that reason. Otherwise, the counteroffer delays the departure rather than preventing it. Leaders should weigh three downstream risks before making one: the underlying issues remain, doubts about leadership grow, and team morale drops.

Leaders often overestimate what a counteroffer can achieve. If the employee accepts, several consequences follow that are easy to miss in the rush. Here is why a counteroffer to someone who has already resigned can do more harm than good.

It likely doesn’t address the underlying issues

Ask yourself whether the counteroffer addresses the reasons the person resigned in the first place. Will the offer keep them happy and help them thrive on your team? Or is it a temporary fix to avoid dealing with a bigger problem?

The test is whether the offer makes sense for the company and the employee. Is the resignation really about the promotion or the raise? Or is it about excessive workload, a difficult manager, or a lack of growth? Often a counteroffer does not touch the real reason, so finding the root cause is the leader’s job.

It may seed doubts about your leadership capabilities

The outcome of a counteroffer reflects on your leadership. It is counterproductive to keep someone after they resign if they are not set up to succeed.

For example, a counteroffer might include a promotion, but is the person ready for it? Without extra support or training, you may set them up to fail. You also need to defend the decision to HR, your own manager, and leadership. Poor performance then reflects badly on the employee and on your ability to assess and coach talent.

Furthermore, if the employee cannot perform in the new role, they may leave by choice or be asked to go. Either way, you end up with the same empty position, and a dent in your reputation as a manager.

It can negatively impact team morale

Other team members will know immediately if the counteroffer is a promotion. If a colleague suddenly gets a new title or more pay when they were not next in line, morale suffers. It can spark gossip, with (sometimes wild) speculation about how and why it happened.

It can also erode respect for the person if others feel the promotion was not earned. Worse, it teaches the team that resigning is the fastest route to a pay rise. So a counteroffer meant to stop one resignation can prompt others to start looking outside. Instead of focusing all your energy on one departure, make sure the rest of the team is energised by their work and is not a flight risk.

Do employee counteroffers work?

Sometimes, but less often than employers hope. Robert Half surveyed 500 Australian hiring managers in October 2025. Where a counteroffer was made, 46% said the employee was still with them, while 32% said the employee left within 12 months and 7% said the employee declined and left anyway.

Employers themselves are split on the tactic. In the same study, 39% called counteroffers a valuable tool to retain top talent, and 28% called them a necessary tactic given wage competition. However, 20% said they are a short-term fix that rarely solves deeper issues, and 11% said they avoid them.

Treat these figures with care. They come from employers, not employees, and from hiring managers in finance, accounting, IT and technology, and HR. Still, they point one way. Roughly two in five employees offered a counteroffer had gone within the year, including those who declined it. So a counteroffer buys time far more reliably than it buys loyalty.

Older claims that “half of people who accept a counteroffer leave within months” circulate widely, but they rarely trace to a primary study. The Robert Half figures above are recent, Australian, and published with their method, which makes them a sounder basis for a decision.

When can a counteroffer make sense?

A counteroffer makes sense when the employee’s reason for leaving is something you can fix and should have fixed anyway, such as pay that has fallen behind the market, a missed promotion they were ready for, or a working arrangement you could offer. In those cases, the counteroffer corrects an existing problem rather than buying silence.

Flexibility counts here too, because the types of flexible working you can offer cost little next to a pay rise. Now consider two resignations in the same week. One engineer is leaving because her salary is 15% behind what peers earn elsewhere, and her manager had already flagged it in the last review. A market adjustment fixes the real issue. Another engineer is leaving because he no longer trusts his manager. No pay rise changes that, so a counteroffer only postpones the exit.

So ask three questions before you counter. Would you make this change if the person had not resigned? Does it address the reason they gave, and the one they might not have said out loud? Can you offer the same thing to others in a similar position without breaking your pay structure? If any answer is no, let them go gracefully.

How do you make a counteroffer properly?

Make a counteroffer properly by talking first, then putting any agreed change in writing. Hold an honest conversation about why the person is leaving, decide whether you can fix it, and confirm the new pay, title, duties, or arrangement in a signed letter. Keep it consistent with your pay framework and the relevant award or agreement.

Timing matters, because the notice period is running. According to the Fair Work Ombudsman, an award, enterprise agreement, or employment contract may set how much notice an employee must give, and notice starts the day after it is given. So agree a decision date, and avoid a drawn-out bidding war with the new employer.

Then record the outcome. Update the employee’s record with the new terms, store the signed variation with their other employment documents, and set a check-in for a few months later. That check-in is where you find out whether the counteroffer fixed anything, or only delayed the next resignation letter.

How can you reduce the need for counteroffers?

Reduce the need for counteroffers by finding and fixing the reasons people leave before they resign. Regular stay conversations, fair and timely pay reviews, clear career paths, and early action on workload or manager problems all lower the number of resignations you face. Proactive retention is cheaper than a counteroffer, and far more reliable.

The evidence favours acting early. According to Gallup, 52% of employees who quit said their manager or organisation could have done something to keep them. In addition, 51% said no manager or leader had spoken with them about their job satisfaction or future in the three months before they left.

Robert Half’s research shows employers moving the same way. In its 2026 study, 41% of Australian employers said they prioritise proactive retention strategies such as career development, salary reviews, and engagement initiatives. By contrast, only 17% rely mainly on counteroffers, while 35% use a mix. Watching for the early signs that culture is stalling is a practical place to start.

What should you look for in HR software for retention?

Look for HR software that shows you retention risk early and keeps the paper trail tidy when terms change. Useful features include regular performance check-ins, pulse surveys, a complete employee record with pay and role history, and digital documents with e-signatures for contract variations. Together they turn retention from guesswork into a routine.

Many mid-sized organisations still track pay reviews in spreadsheets and store variation letters in email. That works until a counteroffer needs approving quickly and nobody can find the last review or the current contract. Central HR management software removes that scramble.

Worknice is one option for Australian organisations of 200 to 5,000 employees that want employee records, documents with e-signatures, surveys, and performance reviews in one HRIS, alongside payroll systems such as Xero, MYOB AccountRight, MicrOpay, KeyPay, Employment Hero Payroll, or ELMO Payroll. However, an organisation that wants compensation benchmarking built in may need a specialist pay tool as well.

Frequently asked questions

What is an employee counteroffer?

An employee counteroffer is an improved set of employment terms offered to an employee who has resigned or is about to leave. It can include a pay rise, a promotion, a bonus, equity, flexible working, or a move to another team. The aim is to change the employee’s decision before their notice period ends.

Do counteroffers usually work?

Often they only delay a departure. In Robert Half’s 2026 survey of 500 Australian hiring managers, 46% said an employee who received a counteroffer was still with them. However, 32% said the employee left within 12 months, and 7% said the employee declined the counteroffer and left anyway.

Should you accept a counteroffer from your employer?

Accept a counteroffer only if it fixes the reason you decided to leave. If the issue was pay that had fallen behind the market, a fair adjustment may solve it. If the issue was your manager, workload, culture, or career growth, more money rarely helps, and nearly a third of people offered one still leave within a year.

What should be included in a counteroffer?

A counteroffer should state the new terms clearly, such as pay, title, duties, working arrangements, and start date, and be confirmed in a signed letter. It should fit your pay framework and the relevant award or agreement. Include a check-in date to review whether the change has addressed the employee’s reasons for leaving.

How can employers avoid needing counteroffers?

Employers can avoid needing counteroffers by holding regular stay conversations, running fair and timely pay reviews, offering clear career paths, and acting early on workload and manager problems. Gallup found that 52% of employees who quit said their employer could have kept them, so most of the effort belongs before anyone resigns.

About the author

Graham Martin is Co-founder of Worknice, an Australian HRIS built for mid-to-large organisations. He has spent more than a decade working with Australian People and Culture teams on HR systems, compliance, and payroll integration.

Related reading

• Signs your workplace culture is stalling: five early warnings that often come before a wave of resignations.
• Types of flexible working you can offer: arrangements that can keep people without a pay rise.
• What effective performance management looks like: regular reviews that surface flight risk early.
• 25 common HR metrics to track: turnover and retention measures worth watching.

Sources

1. Robert Half Australia. “The rise and risk of counteroffer culture.” Press release, 16 June 2026 (research conducted October 2025, 500 Australian hiring managers). https://www.roberthalf.com/content/dam/roberthalf/documents/au/en/indexed/press-release/Robert%20Half%20-%20counteroffers%20-%20Jun.pdf
2. Australian Bureau of Statistics. “Job mobility, February 2026.” Released 31 July 2026. Retrieved 11 October 2026. https://www.abs.gov.au/statistics/labour/jobs/job-mobility/latest-release
3. Australian Bureau of Statistics. “Job mobility, February 2022.” Retrieved 11 October 2026. https://www.abs.gov.au/statistics/labour/jobs/job-mobility/feb-2022
4. McFeely, S., and Wigert, B. “This Fixable Problem Costs U.S. Businesses $1 Trillion.” Gallup, 13 March 2019. https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx
5. Fair Work Ombudsman. “Resignation.” Content last updated 28 August 2026. Retrieved 11 October 2026. https://www.fairwork.gov.au/ending-employment/resignation