Employees should talk with boss before changing jobs for salary

People ready to leave job for a 10% pay rise, but 58% would stay for the right counteroffer, says top recruiter

Paul Mc Clatchie, founder and CEO of Engage People, advises people to review their career prospects in their existing role before seeking better salaries elsewhere.

Employees using the buoyant jobs market to negotiate salary increases should fully review their career prospects in their current role, says Paul Mc Clatchie, CEO of specialist recruitment firm Engage People.

A recent survey of around 800 legal, financial and other professionals by the Dublin-based firm found that the majority of professionals surveyed appear to be happy at their work. However, there is a rising trend of employees stepping towards the door, tyre-kicking around salary increases.

Pay remains the top motivation to move, and a 10% salary increase was the average expected by those surveyed to leave their job for a new role. However, 58% also said that they would turn down an offer if their current employer were to make a suitable counteroffer.

“It creates a big challenge for our sector,” said Mr Mc Clatchie. “If someone is just leaving for salary alone, we encourage them to talk to their boss about their potential for career progression. You have to look to see where your experience can be valuable across the business. I would say 60% of firms are being pushed to increase salary in this way.” 

 He cites Patty McCord’s book ‘Powerful’, in which the former Netflix chief talent officer says that management at the US streaming service decided to stop horse-trading with employees in this way, and just leave the door open for those who wanted to leave.

“They felt it was a bad model, so they just stopped counter-offering in those cases,” said Mr Mc Clatchie. “What we try to do is to get people thinking about their own careers. Of course, at, say, 23 years of age, people have all sorts of considerations inside and outside work, so they’re not always looking at their full career path.

“We try to lead that conversation. With our own team at Engage People, we talk with our team every few months about their role and their future.

“If you try to have that conversation when someone has already resigned, it’s very often too late. It’s best to be proactive. I find that I feel better myself once I’ve tried, at least I can tell myself that I’ve tried my best.” 

 The survey also found mixed fortunes in the financial and legal sectors when it comes to remuneration in the past year.

While 63% expect a salary increase over the next 12 months, almost a quarter (23%) of the 795 people questioned did not get a pay increase in the past year. 11% was the average increase in salary, for those who did.

Some 61% saw their hours impacted by Covid-19, and 47% took a Covid-related pay cut. Of those, the average drop in pay was 12%.

“Anecdotally, the flexibility to work from home has saved employees money, while also contributing to a better work/life blend. So, a short-term impact on compensation hasn’t upset too many in the professions,” said Mr Mc Clatchie.

“People were happy enough while they were working from home, but people have started looking around to change jobs since the return to the office,” he said.

“People are looking at the rising cost of living, notably fuel costs for people commuting in Dublin, Cork and Galway, and thinking they need to change jobs for higher salaries. New graduates starting on €25,000 were getting by working from home. Bring them back to the office and they’re looking for more.”

 In this context, many companies are turning to perks and bonuses. on top of base salary, many will have a car allowance and fuel cards, and most get an employers’ pension contribution, meaning total remuneration is generally higher than basic pay, Paul Mc Clatchie outlines.

On the bonus front, 75% of respondents in accountancy, banking, financial services and legal roles say they received a bonus last year. Two-thirds, 67%, were satisfied with the level of bonus. Around 26% of base salary was the average bonus for junior roles, across those surveyed, where earnings were predominantly under €35,000.

Around 10-15% was the mean annual bonus in the accounting area, with higher bonuses in banking relationship manager and sales roles.

Although 82% claim to have worked some form of weekly overtime, up to three hours a week, under half, just 41%, received paid overtime. Again, overtime was more common in junior level roles, up to a €40,000 base salary.

Some 55% anticipate their company’s staff numbers will grow over the coming 12 months. In all, 84% of the professionals responding confirmed they are happy with their current work-life balance.

But, while 58% in financial and legal roles are satisfied, or very satisfied, in their current role, almost two-thirds, 62%, admit they would leave their role if the right opportunity came up.

“The survey also identified that the top considerations when looking for a new role are salary or compensation, followed by career progression opportunities, the people in the company, and the company culture,” said Mr Mc Clatchie.