An employee that you manage has come to you saying that they have a job offer from another company and are giving you their two weeks notice. This specific employee is hard working and valuable to your company. You counted on them being around for upcoming work that needs to be completed and rehiring and training someone for their position will take months. This is your chance to counteroffer and get them to stay, but should you?
There are numerous theories and statistics on the topic of counteroffers and most of them will tell you “DON’T DO IT”! But there are times when it’s appropriate.
Why you shouldn’t counteroffer
Obviously, when an employee tells you they’re leaving, you need to find out why. Often, the new job is just an overall better opportunity for them. If this is the case, there really isn’t anything you can do and you should not counteroffer. Money will only be a temporary fix and you are sure to find yourself in this same situation in the near future.
A Pittsburgh staffing firm reports that more than 50% of all employees who accept counteroffers change companies within the following 24 months.
While the thought of going through the hiring process and training someone new sounds like a lot of work, you will most likely ultimately end up having to do it anyway.
You also need to think about your feelings. Some managers might find it hard not to take this situation personally and harbor ill feelings toward the employee. If this is the case, you need to be careful about how you will treat this employee going forward. Some companies have implemented a “no counteroffer” policy for this specific reason.
Why you might counteroffer
The only time counteroffers seem to be successful is when the employee is leaving because the new job is offering them more money, and for that reason alone. If you can eliminate any other issues the employee is having with the job or company and it really only is about more money, you should speak to HR and look at your budget to see if a raise is something you can manage.
Tread lightly though. One human resource manager says, “Our exit interviews clearly show that the No. 1 reason people leave us is for a better job opportunity, not for a higher salary or more benefits, which usually are way down on the list.”
How you can prevent counteroffers
The most proactive way to prevent counteroffers is to consistently conduct performance appraisals and salary research. During the performance appraisals, key into areas of dissatisfaction that your employees have and do what you can to make them right. However, some people are not complainers and will be quiet about their dissatisfaction (and quiet about their job hunt too). Conducting salary research to make sure your employees are getting paid what they need to be (even a little over to really help turnover) will also show your dedication and appreciation of them without them having to say anything.
Every situation with a counteroffer is unique and can be managed differently. You need to carefully analyze what is right for your employee and company. Sometimes, it might result in a happy ending but other times you have to be prepared to part ways.