With counteroffers on the rise due to a competitive hiring landscape and talent shortages, employers are offering higher salaries and perks to retain property managers. But research shows these offers rarely lead to long-term retention: 74% of employees who accept counteroffers leave within a year. In property management, especially in talent-driven markets like Sydney, Melbourne, and Brisbane, effective retention hinges on more than just counteroffers—it requires addressing deeper issues like workplace culture, growth opportunities, and work-life balance, which are critical for reducing turnover costs and building loyalty.
So we need to take a closer look at counteroffer strategies and what it means for the property management especially in Sydney and Brisbane where there’s salary inflation and a candidate driven market.
Here’s what you need to consider.
Why Counteroffers Are on the Rise in Property Management
The rise in counteroffers is due to several factors in the property management space:
- Shortage of Skilled Property Managers: Real estate demand is surging and demand for property management staff is outpacing supply so companies are fighting over the limited talent pool. A candidate’s market has emerged and everyone is going aggressive with their hiring strategies.
- Salary Inflation: With demand being so competitive property managers in NSW and Victoria are seeing big salary increases. Senior roles can offer up to $160,000 per year and companies are willing to pay a premium to keep the best talent on board.
- Economic Uncertainty: Many employees see counteroffers as a way to improve their financial security without taking on the risk of changing roles in uncertain economic times. Employers play on this sentiment and use counteroffers to encourage staff to stay rather than go looking for new opportunities.So these factors have led to counteroffers being used as a tool to address both retention and competitive pressures.
The Problems with Counteroffers for Employers
While counteroffers seem like an instant solution to keep key staff members, they come with some downsides:
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Short Term Fix, Long Term Costs: As mentioned earlier 74% of employees leave within a year of accepting a counteroffer. The reasons vary but studies show that employees often reconsider because the underlying issues – workplace culture, lack of growth opportunities or misalignment with company values – haven’t been fixed.
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Higher Salary Expectations: Counteroffers fuel salary inflation as each retention based increase raises the industry average. In property management this has created a situation where even junior property managers are asking for higher pay rates.
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Reduced Loyalty: Accepting a counteroffer doesn’t necessarily mean increased loyalty. Employees who have shown they are willing to leave may still have doubts about their role and may be more likely to consider other external offers down the track.
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Team Dynamics: Counteroffers can impact team morale if colleagues find out that certain employees are being offered much higher pay to stay. This can lead to resentment or even prompt other employees to go look for other offers so they can get a counteroffer themselves.
So employers need to weigh up the short term benefits of a counteroffer against the long term costs of turnover.
Reasons Not to Counteroffer
While counteroffers may seem appealing, it’s important to consider their impact on team dynamics and morale. Instead of merely responding to an employee’s resignation with a financial incentive, it’s vital to analyse the situation thoroughly. Often, letting an employee go can create opportunities for new talent that may better benefit the agency in the long run. Here are the reasons :
- Concerns About Long-Term Commitment
If you think the employee won’t be with the company long term a counter offer may be a waste of time. Often employees who are thinking of leaving have already mentally checked out and throwing money at the situation doesn’t guarantee their commitment. You need to understand why they want to leave—if it’s for new challenges or a different work environment a counter offer won’t address those underlying issues.
- Lack of Additional Value
Counter offers should reflect the value the employee brings to the agency. If the employee hasn’t demonstrated significant contributions or improvements in their role it may not be wise to reward them with a higher salary. Promotions and raises should be based on merit and performance not just as a reaction to a resignation. Offering a counter when no added value is present can set a bad precedent in your team.
- Wage Gaps Among Team Members
When considering a counter offer you need to think about how the increase will impact equity among existing staff. If the gap between the counter offer and what other employees in similar roles are earning is big it could create resentment or unfairness in the team. Such gaps can lead to dissatisfaction and increased turnover among other employees who feel undervalued.
- Need for Fresh Energy and Change
Sometimes a team needs a shake up. If an employee has been with the company for a while their departure could open the door for new talent and fresh perspectives. New employees can bring new ideas and different approaches that can energise a team, drive change and ultimately benefit the agency in ways that keeping the current employee may not.
- Availability of Better Candidates
In competitive job markets you need to know when you have better candidates. If you’ve done your due diligence and found great candidates who fit your company culture and values it may be more beneficial to go after those candidates rather than counter the current employee’s offer. Hiring someone new could be a better return on investment than keeping an employee who isn’t the best fit.
By addressing the issues before employees leave, companies can reduce their reliance on counteroffers and create a more stable workplace.
When Counteroffers May Be Okay
While counteroffers can lead to increased turnover they can still be useful in some cases:
- Key Talent in Critical Projects: If an employee is in a critical role in an ongoing project a counteroffer may buy you time to complete the project. But plan for a long term transition so you’re not dependent on one person.
- Temporary Solution in a Tight Labour Market: In areas where skilled property managers are in extremely short supply a counteroffer may be a temporary retention strategy until a permanent hire can be made.
In these cases treat counteroffers as a short term solution while working on longer term retention strategies.
Counteroffers and Loyalty: A Fine Line
The idea that counteroffers can “buy” loyalty is a myth. Employees who go external likely had issues with their current role whether it be limited growth opportunities, workplace culture or other reasons. For example an employee may accept a counteroffer to stay in a familiar environment with a pay increase but that alone doesn’t fix any deeper dissatisfaction with the role or the company.
When employees receive counteroffers it can send a message that pay increases or benefits are only available to those who are willing to leave. This can create a transactional relationship with staff which is often bad for long term loyalty and engagement.
In property management where team cohesion and stability is key to managing complex portfolios and client relationships this can backfire and impact both employee morale and client satisfaction.
A Retention Focused Culture
Counteroffers are seen as a quick fix in the short term but the high turnover rate after these offers shows they are not a long term solution. Employers should aim to build a retention focused culture that values proactive engagement, competitive compensation and regular recognition rather than reactive strategies.
By doing so property management companies can build loyalty and commitment and create an environment where employees feel motivated to stay without the need for counteroffers. Retention focused strategies like professional development programs and a supportive work environment will not only reduce turnover but also make your agency an employer of choice in a competitive market.
Need Help With Retention Strategies?
If your agency is struggling to attract and retain top property management talent MSR Talent can help you navigate today’s recruitment landscape. Get in touch today to talk about solutions that go beyond counteroffers to build a team that’s committed to your success for the long term.
