Should You Make a Counter Offer?

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Should You Make a Counter Offer?

 19th Nov 2015


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All employers at one point or another have had to deal with someone leaving the business. This can be sad, frustrating and even downright inconvenient but it’s the reality of the working world. People want to move on for one of a hundred reasons: fresh challenges or a job that better suits their skills to name just two.

ClientGeneralAdIt’s fair to say that much of the time the response from a good employer will be a firm handshake and a ‘good luck and god speed’ style sentiment. But what about the employees the company just cannot live without? Those who are universally liked, demonstrate outstanding job performance, possess years of valuable experience and generally play an important part in keeping the business running smoothly.

 Responses vary from the employers we’ve spoken to over the years but the word ‘panic’ crops up a fair bit after which the obvious question is asked: why are you leaving?

Assuming they’re willing to discuss it, the reasons will likely fall into one of the following categories: better money, better benefits, a more challenging role, a more varied role, a more senior role, flexible working, better work/life balance, closer to home or a combination.

Whatever the reason, the urge to match or beat the offer to keep that valued employee is a strong one. The big question isn’t what should you offer but whether or not you should make the offer at all. Here’s some things to consider before making a counter offer:

  1. Will the counter offer actually fix the problem?

Setting aside the issue of whether or not your employee was actively looking or approached, they were sufficiently interested in a new position to go through the interview process, consider an offer, accept it, write a letter of resignation and then hand it to you.

Will a counter offer allow you retain a dedicated member of staff or simply buy off someone who is clearly motivated to leave? A pay increase, whilst a consideration, is rarely the primary motivator for someone wanting to change jobs and does little more than delay the inevitable. According to a number of sources, including and CBS, up to 90% of employees who accept a counter offer leave within 6 months.

  1. Are you making matters worse?

Discussing your most valued employee’s future with the business after they’ve resigned isn’t the ideal situation. Whilst more money and better perks will dazzle the average employee and it will be hard not to feel flattered, is it merely deepening a wound and then covering it with a plaster?

The message will be ‘you have to be prepared to leave to be recognised and appreciated’. Whether that’s true or not, any employee would be forgiven for feeling that way. You run the risk of inadvertently reinforcing the frustrations they’re already feeling.

  1. Will you be setting a dangerous precedent?

Nothing travels faster than the speed of gossip. No matter how much you try to keep the employee’s pay rise and the circumstances surrounding it, a secret word has a habit of getting out.

It sends a message to the restless employees within the company to expect the same treatment. Worse still, offering someone a pay rise purely because of a job offer could upset the company’s pay structure.

  1. How will it impact on the team?

Paying off a single person to make them stay doesn’t send a very positive message to the rest of the team. They won’t need to know specifics to know that person was incentivised to stay. They will notice the transformation from a malcontent to advocate. The majority of candidates who accepted counter offers reported being resented by some or all of their team.

The same survey also suggested that they felt a lack of trust by their colleagues and superiors which exacerbated existing negative feelings and was most likely a contributing factor to moving on within the reported 6 month window.

  1. Who does the counter offer truly benefit?

Retaining an employee who wishes to leave solves a short term problem whilst presenting a series of long term ones:

That employee will, statistically, leave anyway having drawn a higher salary giving them leverage to ask for more from their next employer.

Morale will be affected as that employee will have a better package than the rest of their team but not necessarily bring with it a positive influence considering they had already decided to leave.

Salary bandings can be disrupted whilst setting the precedent that employees can threaten to leave in the hope of getting a benefits boost or a pay rise.

ClientGeneralAdThe important thing to remember is whilst people may want to leave, others will want to join. Induction and training takes time but new employees bring experience, fresh ideas and infectious enthusiasm. Next time someone you can’t live without resigns, it could be the best thing to ever happen to your company.

If you have requirements you’d like our support with, we want to hear from you. Contact us or submit your vacancies today and one of our specialist consultants will be in touch.

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