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Should I make a counter offer?

It is widely acknowledged that over 80% of employees will leave their organisation within twelve months of accepting a counter offer, some as early as three months. Despite this many organisations continue to counter offer employees that resign to move to another employer, boosting salary packages and benefits in an often futile attempt to encourage these employees to stay put.

We counsel  candidates through these conversations on a daily basis. Much has been written about the pros and cons of accepting counter offers with almost universal advice – don’t. As an employer however we have all felt the punch in the gut that comes when a top performing employee resigns, often out of the blue, taking away from your organisation potentially a massive amount of knowledge and experience.  This can leave organisations feeling vulnerable and weakened and managers overwhelmed at the thought of having to replace someone considered essential to the business. It is therefore understandable that many employers will react in these circumstances by doing whatever they can to encourage the individual to stay – however before making a counter offer it is crucial to take a moment to consider the following:

Are you going to be able to regain trust in this person? Once an employee makes a decision to resign they have mentally begun to disengage from your business and demonstrated a perceived lack of loyalty to the business. Are you willing then to bring them back into a role where they are trusted with confidential information and a crucial role in the running of the organisation. Will you be consistently looking over your shoulder, wondering when they are going to do it again or if they are still looking for a better opportunity?

Many employees will choose to leave because they are ready for a better job opportunity. If your business is not able to offer the individual the career development they are looking for consider if keeping them is the right thing to do.

The majority of counter offers are based around increased compensation however this is seldom the primary reason an employee is leaving. An increased salary is the equivalent of a band aid over a gaping wound – it won’t solve the underlying issues that have led to the employee looking elsewhere and they will ultimately resurface which is why the majority of employees in this situation leave shortly after anyway.

Occasionally it is about the money – in this situation it is important to be wary of the employee who is using another offer as a bargaining tool. They don’t really want to leave but believe an offer from another employer will be countered therefore increasing their remuneration package outside of the normal review cycle.

Whether employers choose to make a counter offer or not it is important that they weigh up these points and make a decision that is considered and in the best long term interests of the organisation. Better still are the organisations that don’t allow themselves to end up in this situation – they have a talent management strategy in place that ensures no one employee is indispensable and they can be replaced when necessary without inordinate pain. They also take the time to understand their employees drivers and motivators, provide an environment where they feel supported and are offered every opportunity to develop and grow; reducing the chance of shock resignations.

So, if a counter offer is in the best interests of your organisation ensure that it addresses the underlying issues that have motivated the employee to look elsewhere. But ultimately accepting the resignation and wishing the employee well will in the long term often be the better decision – take the time instead to make sure your remaining employees are engaged and motivated and compensated well for the work they are doing.

12 December, 2018  |  Michael Floyd  |  POSTED IN: For Clients, News, Recruitment  |  TAGGED:

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