It's Easy to Panic ...
The candidate market is tight, and when a talented employee hands in their notice, making a counter offer can feel like a natural way to save yourself months of recruiting headaches and expenses. Employers also feel compelled to give a counteroffer when the employee has difficult-to-find skills or they have been with the company for many years.
- Should You Consider a Counteroffer? It makes sense to consider a counteroffer when the employee is an integral part of the team and is worth the effort and expense to try and keep them.
- Consider More Than Money in a Counter. If the employee is looking for more flexibility or a shorter commute, consider offering telecommuting options as part of the counteroffer rather than just money.
Counter Offers "Work"
Two-thirds of resigning employees change their minds when they are presented with a counteroffer, thus "solving" everyone's problems. But it's not always that simple ...
... Because Counteroffers Are Also Counterproductive
Often, once an employee accepts a counteroffer, things change for the employee, the boss and even other members of the team.
- The employee gets their payday, but at what cost?
- Bosses often question the loyalty of an employee who attempts to resign.
- Co-workers feel resentful.
- The employee is still stuck in the same job.
There Are Lots of Reasons to Take a Beat
Before giving in to panic and making a counteroffer, pause and ask yourself some important questions.
- What is the Real Issue? If an employee is dissatisfied with their job, throwing money at the problem does not solve the root cause of their issue.
- What is YOUR Motivation For Making the Counter? Do you honestly feel this particular employee is irreplaceable, or are you just afraid of being left in the lurch?
- Are You Setting a Bad Precedent? Make no mistake. The employee will tell co-workers they got a counteroffer worth accepting. This could lead to the same expectations of anyone who submits a resignation in the future.
- Are You Being Fair? Why are you giving the employee more money just for resigning? Do they truly deserve it? If so, why didn't they get a raise earlier? If not, how will this move be perceived by other members of the team?
- How Will Morale Change? Some of your employees will feel resentful knowing a co-worker got a raise for finding a new job while they stayed loyal and continued to work. That resentment could lead to turnover.
Counteroffers Are Often Band-Aids
Despite the fact that two-thirds of people accept counteroffers, nearly 80% of those folks leave their job permanently within six months and 90% leave within one year.
The Right Replacement is Out There ...
... but finding them isn't always easy. If you need to replace a talented employee, partner with a recruiting expert who will shorten time to hire, control costs and ensure you find exactly who you need.
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