We all like to see the best team players working for us forever. How easy is it to retain such team members in the current environment?
In reality, disruptions 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 then one of your key employees walked into your office and announced 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 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.
While more money is always a motivator, there are generally other factors that drive people to look for new jobs: personality fit, organization 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 up once the glow from that raise wears off.
That counter offer will have helped you retain a dissatisfied employee with unresolved issues.
Pay competitive packages
You should strive to pay competitive salaries and benefits to all your employees, not merely to those who think about leaving. Your salaries need to be set according to objective market data; they shouldn’t be a reaction to who’s about to leave at any given time.
This practice is not sustainable and you are only setting a bad precedent which will upset the stable employees. If the 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 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 part of the inner circle. That’s not a good for either of you.
And on her side, you’re now the company that she had to threaten to leave in order to get what the employee wanted, which also isn’t good for either of you. There’s a reason that the rule of thumb among recruiters is that 70 to 80 percent of people who accept counter offers either leave or are let go within a year.
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 easier task the next time when there is another good offer.
Counter-offer
Now, are there times where making a counteroffer make sense and works out? Sometimes – but they tend to be the exception, not the rule. At a minimum, be very cautious before making a counteroffer 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 prepared for your employee not accepting it. The best policy is to identify and prevent possible problems even before your valuable employees resign. Also, 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.