Golden hellos are back in a growing war for talent. Increasingly, the best agency staff are being lured by huge golden hellos while existing bosses attempt to hang on to them by counter-offers.

According to recruitment boss Andrew Deverell-Smith, it is a cat and mouse game which has intensified in recent months.

And he said that bumper offers from prospective employers are winning out against existing bosses’ attempt to hold on to their best staff.

He said that with talent in the market as scarce as it is, it is more likely than ever that an employer will make a counter-offer when an employee tenders their resignation.

Avoiding an empty seat and the time and cost implications of recruiting and inducting an employee is high on most employers’ agendas and he said bosses faced with losing a key staff member are paying over the odds to mitigate this risk.

Despite their prevalence, do counter-offers make good business sense?

Deverell-Smith says no, with just 16% of those employees that accept a counter-offer still being with the company 12 months later – and, he said, there are several reasons for this.

First and foremost, the motivator for wanting to leave a company is rarely money alone and whilst a bump on the salary may temporarily stifle the other underlying issues, they will most likely resurface a few months down the road.

Secondly, no matter how it is handled, resigning almost always tarnishes the employee-employer relationship which often becomes an issue over time.

In fact, Deverell-Smith says that his firm’s experience shows that counter-offers serve only to turn resignations into lengthier, more expensive goodbyes.

He said golden hellos – front loaded signing-on bonuses used to incentivise candidates from rival firms – are rapidly emerging as the favoured recruitment strategy, particularly in and around London and in the home counties.

Deverell-Smith, chief executive of Deverell Smith, said: “Golden handshakes are back.

“What’s most interesting is that they are being offered without prompting, or candidate inducement.

“The employers are recognising that to stay ahead they need the best talent in the market.

“Many firms in the property industry have acquired a bit of a war chest and they are investing this in people.”

He said the strategy is predominantly used to attract candidates for mid-level to senior roles.

Recent examples include a 32-year-old surveyor with ten years’ experience placed by Deverell Smith. He was given a £15,000 golden handshake with a further £15,000 drip fed throughout the year on top of a basic salary of £40,000, equating to a 10% increase on his previous earnings.

The firm also recently saw a 36-year-old development manager with 15 years’ experience receive a £40,000 golden handshake with a guaranteed bonus of 100% of his £100,000 basic salary, which was a 60-70% increase on the overall package he was leaving behind.

Deverell-Smith said: “For the best part of half a decade many salaries have been effectively capped.

“What we are seeing now is a pressure cooker effect. The lid has blown off.

“Up against the excitement of a new firm and these knock out offers, counter-offers have rather lost their punch.”