With a finance market that has become more candidate led since the recession, employee ‘buy back’ has never been more aggressive. Line managers do not want to lose their best people or deal with the disruption that their departure inevitably creates. With such a candidate-driven market, there is a risk that the company simply will not be able to find a suitable replacement. So the company offers them more money (or other benefits) to persuade them to stay. The reality is most employees who are ‘bought back’ by their employers, leave within the following six months so buying back employees is usually not the solution.
What can employers do to prevent a situation where they need to buy back an employee?
Staff retention should be higher up on many employers’ agendas. Being able to offer the following in an engaging but challenging working environment, goes a long way to prevent good people looking to move on:
- Continued opportunities to progress
- Competitive compensation including study packages
- Flexible working arrangements to accommodate a work life balance
- Clear strategy/vision of where the business is going
- Empowering and influential managers who lead by example
Employers - how to handle a ‘buy back’ situation
As an employer, before acting you should always consider the potential consequences of expediting a promotion or vastly increasing someone’s salary, and the effect it could have on the rest of the team/business.
1. Make sure you fully understand the employee’s reason/s for wanting to leave the company
2. Don’t overtly put down the organisation they are looking to join; this will appear disingenuous
3. Talk about what would excite them enough to stay (role, location, money etc)
The effect of the ‘buy back’
Exceptional finance professionals remain in short supply and they are the candidates that every client wants to hire. They are also the people that employers don’t want to lose and so businesses are going above and beyond to retain these top performers, typically by offering significant financial incentives to stay.
Unfortunately, this situation magnifies the problem of the candidate-led market that exists right now. The current lack of high calibre candidates open to new opportunities is resulting in far fewer candidates to select from when an employer is hiring. To compensate for this, recruiters and employers are being forced to become more and more creative regarding the study packages and flexibility of study leave as well as offering a work life balance to ensure it attracts and retain the best hires.
Pros and cons of buying back an employee
- You have retained a good employee, at least in the short term, and minimised disruption to the team
- You have had to offer something you previously may not have done to retain that individual, calling into question whether that person really deserves that promotion, salary increase etc.
- You now have an employee whose ongoing loyalty and commitment to you and the business is questionable.
- If word gets out that you are prepared to ‘buy back’ people who resign, then others may use that as leverage to better their own circumstances within the company.