Counter-offers not a good idea
can sneak up on you or any other company at unexpected times. Companies
must be prepared for change that can impact its operations negatively.
You thought your week was going smoothly, but one of your key
employees walks into your office and says that he's resigning.
If you're like many managers, you panic and start thinking about what
you can offer to get him to stay. This is quite natural in an
environment where talent is rare and the training cycle is long.
However, be aware that making a counter-offer to stop an employee
from taking another job is rarely a good idea and there are many reasons
why it is not.
While more money is always a motivator, there are other factors too
that drive people to look for another job. Personality fit, organisation
fit, boredom with the work, conflicts with bosses and co-workers,
pressure for delivery of results or any other general dissatisfaction -
all reasons that will rear back, once the glow from that raise wears off
and you will retain a dissatisfied employee with unresolved problems.
You should strive to pay competitive salaries and benefits to all
your employees, not only to those who think about leaving. Your salaries
need to be set according to objective market data.
It shouldn't be a reaction to someone who is about to leave soon.
This practice is not sustainable and you are only setting a bad
precedent which will upset stable employees.
If word gets around that all it takes to get a big raise is to
threaten to leave, you can be sure that you'll have other employees in
your office resigning too.
You don't want people to start thinking that they need to have one
foot out of the door to get a raise.
If you successfully counter-offer and persuade him or her to stay,
what happens next? At many workplaces, that employee will no longer be
quite as trusted as he or she used to be, no longer a part of the inner
That's not a good thing for either of you.
And on his side, you're now the company that he had threatened to
leave, to get what he wanted, which also isn't good for either of you.
There's a valid reason for the rule of thumb among recruiters that 70
to 80 percent of people who accept counter-offers either leave or are
allowed to go within a year of accepting the offer.
You may want to recall your past experience to know your own number.
Once an employee makes up his or her mind to leave, it becomes an easy
task the next time there is a good offer.
Are there times where making a counter-offer makes sense and works
out well? May be sometimes. But they tend to be the exception, not the
rule. At a minimum, be cautious before making a counter-offer and think
through the downsides.
There are several risks associated with making a counter-offer. A top
performer who has resigned has probably already weighed the pros and
cons of leaving.
You should be selective about who to give counter-offers to and let
some of them go without a fight, since counter-offers could be used by
some employees as a strategy to ask for a salary increase.
Even if you decide to make a counter-offer be aware that your
employee may not accept it.
The best policy is to identify and prevent possible problems before
your valuable employees resign.
Make sure that your senior employees are mentoring other employees,
so your company won't be crippled if someone leaves.
Finally, a good company will support and wish its employees well,
especially if they know that these employees will be leaving for better
opportunities. Don't hesitate to give your recommendations and referrals
if the employee deserves it.