The Bottom Line: In the 2026 Australian market, talent retention requires moving beyond reactive counteroffers. It demands a proactive strategy prioritising engagement, pay transparency, and cultural alignment over last-minute salary increases. W&Co Search identifies that successful organisations have transitioned from "quick-fix" responses to long-term, sustainable retention systems.
The post-pandemic landscape has fundamentally altered how organisations approach staff retention across Australia and New Zealand. Data highlights a critical trend: while 63% of employers increased salaries to fill roles, 57% of employers now choose not to make counteroffers to resigning staff—a 5% increase from the previous year.
At W&Co Search, we observe that high-performing organisations are abandoning the "band-aid solution" of the counteroffer. Instead, they are using strategic retention frameworks to build workplaces where employees feel genuinely valued from day one.
Counteroffers are losing their appeal for good reason. Research indicates that most employees who accept a counteroffer depart within six to twelve months regardless. More critically, these offers often lead to internal pay inequality, damaging team morale when colleagues discover unequal compensation.
By managing retention through proactive engagement rather than panic responses, you foster organisational trust. Effective senior leaders focus on building the systems that enable retention at scale.
As Australian companies embrace pay transparency, a robust retention architecture is required. One-off salary increases for departing staff should be replaced by:
Structured Career Development: Clear paths for growth that don't require an external offer to initiate.
Regular Compensation Reviews: Aligning internal pay with real-time market benchmarking.
Leadership Investment: Addressing the deeper cultural issues that drive resignations beyond mere compensation.
To navigate this era of strategic talent management, W&Co Search recommends these four practical habits to protect your workforce stability:
Regular Compensation Reviews: Conduct market benchmarking at least annually to ensure your pay structures remain competitive and fair.
Employee Engagement Programmes: Dedicate specific resources to understanding what drives satisfaction, preventing cultural issues from festering.
Leadership Development: Invest in manager training using proven frameworks to handle people-management challenges.
Transparent Communication: Ensure every employee understands their career path and compensation philosophy upfront.
The organisations thriving in 2026 understand that retention is an ecosystem. By combining strategic compensation planning with a focus on culture, you create a resilient environment where top talent actively chooses to stay.
Looking to strengthen your senior leadership team for 2026? W&Co Search specialises in Public Sector, Executive and Senior Leadership search across Melbourne and the public sector. We help organisations find the leaders capable of building these high-performance retention systems. Reach out to W&Co Search today to discuss your next critical appointment.
Q: What is the success rate of counteroffers in Australia? A: Low. Industry data shows that over 80% of employees who accept a counteroffer leave the company within a year, often due to the same underlying cultural issues that prompted their initial search.
Q: Does pay transparency help with retention? A: Yes. In 2026, companies with transparent salary bands report higher levels of trust and lower turnover rates, as employees feel confident their compensation is fair and market-aligned.