The battle for internal audit talent has intensified. While some organisations have slowed hiring amid economic uncertainty, demand for experienced auditors remains strong, particularly for professionals with expertise in technology risk, data analytics, cyber security, AI governance and regulatory compliance. Talent shortages continue to be cited as one of the profession's biggest challenges.
Against this backdrop, employers are increasingly reaching for a familiar retention tool: the counteroffer.
Chief Audit Executives (CAEs) and hiring managers across the market report that candidates who appear ready to resign are being presented with salary increases, enhanced benefits, promotion promises and flexible working arrangements in an effort to persuade them to stay. While counteroffers can sometimes be effective, they also raise important questions for both employers and candidates.
Are organisations genuinely solving the reasons people wanted to leave, or are they simply delaying the inevitable?
Why counteroffers are on the rise
Internal audit leaders are operating in an increasingly difficult talent market.
Boards expect audit functions to provide assurance across a growing range of risks, from cyber security and AI to third-party risk and culture. At the same time, many audit teams are struggling to attract and retain professionals with the technical and business skills required to meet these expectations.
Replacing experienced auditors is also expensive. Beyond recruitment fees and onboarding costs, there is a loss of institutional knowledge, stakeholder relationships and productivity while a replacement gets up to speed. As a result, organisations are becoming more willing to make aggressive retention offers when valued team members resign.
For employers, offering an immediate pay increase can seem far easier than launching a lengthy recruitment process in a competitive market.
The real reasons auditors leave
Salary is often the headline issue, but it is rarely the only reason someone enters the job market.
Over the past few years, Leonid's conversations with internal audit professionals have consistently highlighted a broader set of motivations:
- Limited career progression
- Lack of exposure to strategic projects
- Outdated technology and audit methodologies
- Poor leadership or team culture
- Insufficient flexibility
- Desire to gain international or industry experience
- Burnout and workload concerns
A counteroffer may address compensation, but it frequently fails to resolve these underlying issues.
This is why experienced recruiters often caution candidates to carefully reflect on what prompted their search in the first place. If the root causes remain unchanged, the likelihood of future dissatisfaction remains high.
Why counteroffers often fail
The recruitment industry has long debated the true effectiveness of counteroffers.
While many of the widely quoted statistics should be treated cautiously, multiple industry studies and recruitment surveys suggest that employees who accept counteroffers often leave within the following 12 to 18 months.
There are several reasons for this.
First, accepting a counteroffer can alter the relationship between employer and employee. Management is now aware that the individual was willing to leave, which can affect perceptions regarding commitment and succession planning.
Second, many organisations respond only after receiving a resignation. While a pay rise may feel rewarding in the short term, employees often question why those concerns were not addressed earlier.
Finally, most counteroffers focus on compensation while leaving broader frustrations untouched. If progression opportunities, leadership support or work-life balance remain unchanged, dissatisfaction often resurfaces.
What candidates really want
One of the biggest misconceptions in today's market is that talent can always be retained through higher salaries.
Compensation matters, particularly in markets where inflation and demand for specialist skills have driven salary expectations upward. However, top-performing auditors increasingly evaluate opportunities through a wider lens.
Many candidates are seeking:
- Clearer career pathways
- Access to emerging risk areas
- Investment in technology and analytics capability
- Exposure to senior stakeholders and boards
- Flexible and hybrid working arrangements
- A stronger sense of purpose and strategic contribution
Employers that focus exclusively on pay may find themselves losing talent despite offering competitive compensation.
How Audit leaders can stay ahead
The most successful retention strategy begins long before a resignation letter appears.
Make career development visible
Many departures occur because employees cannot see a future within the organisation.
CAEs should ensure that auditors understand potential career pathways, whether into audit leadership, risk management, compliance, operations or broader business leadership roles.
Invest in future skills
Professionals want to build capabilities that will remain relevant in a rapidly changing environment.
Providing opportunities to learn data analytics, AI governance, cyber risk and emerging technologies can significantly enhance engagement and retention. These are also among the areas where audit leaders continue to report skills shortages.
Conduct ‘Stay Interviews’
Rather than waiting for exit interviews, leading organisations are increasingly conducting "stay interviews" with high performers.
These conversations help identify concerns before they become resignation decisions and demonstrate that employee feedback is valued.
Reward proactively, not reactively
One of the strongest messages a counteroffer sends is that the organisation was willing to pay more only after an employee threatened to leave.
Regular compensation reviews and transparent reward structures can prevent this perception from developing.
Create a compelling Employee Value Proposition
Internal audit is competing for talent against risk, compliance, consulting, cyber security and technology teams.
Organisations that successfully attract and retain talent articulate a clear proposition that combines meaningful work, career development, leadership exposure and flexibility.
The Bottom Line
Counteroffers are likely to remain a feature of the internal audit hiring landscape for the foreseeable future.
However, they should be viewed as a symptom, rather than a solution.
When an auditor decides to explore external opportunities, the decision is rarely driven by salary alone. Organisations that focus exclusively on financial retention tactics may succeed in buying time, but they often fail to address the factors that led an employee to look elsewhere in the first place.
The audit leaders that will win the talent war are not those making the highest counteroffers. They are the ones creating environments where talented professionals never feel the need to leave.
If you are looking to increase employee retention in your internal audit team, Leonid’s Talent Intelligence service can help you identify problem areas and put plans in place to ensure your best people don’t leave. To find out more, please visit our Talent Intelligence page, or reach out to Adam Bond for a friendly chat.
