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Thirsty Thursdays: Counter Offer or Not to Counter Offer

Thirsty Thursdays: Counter Offers, Good or Bad?

We’ve all been there.  We’re cruising along at work, things are going well and boom, a key employee resigns!  After the expletives fly and the screaming and gnashing of teeth subsides, what do you do?

With the difficulty that most organizations face in finding enough of the right talent for their businesses, Counter Offers have become more and more commonplace.  Generally speaking Counter Offers are a bad idea, usually signify some larger underlying issues which can be acute or systemic, and statistically most of them fail to achieve the desired results for either party.  Did you know Counter Offers are absolutely never long-term solutions?  Here are some reasons why…

Once an employee communicates their desire to leave the organization, and then receives a counter offer, it is next to impossible for their manager to trust in their loyalty going forward.  

Often, unless the employee has tried to work out their worries before looking elsewhere, the employee has demonstrated that whatever issues, concerns or problems they may have that led to them pursuing and accepting another job they are not willing to attempt to address them proactively.  If they tried and the manager failed to respond that's an entirely different issue and may be why they are leaving.

From the company's perspective, and depending upon which source you read, 50% or 80% of counter offers result in the employee no longer being employed at that company within 6 months; 90% are gone in 12 months; 93% in 18 months.

From the employee's perspective, 50% of resignations are met with a counter offer; 57% of are accepted; within 60 days 50% are looking again and now often at a higher level of compensation.

Counter offers are often issued in desperation to buy time;  Counter offers are often pursued to get a raise in the current role, or a higher offer in the new role. 

Most people think employees leave because of money but that hasn't been the top driver of attrition for close to 20 years.  

Top drivers of resignations are a lack of challenge/growth opportunities and horrible managers.  

When employees feel like there is no room for growth they feel stuck.  Think of when you were in a terrible traffic jam.  Now picture that's your career.  Get it?

Or think about someone you don't like or don't respect.  Regardless of the reasons can you see yourself taking advice and direction from them?  



If you’re stuck because you can’t live without that person then you’re a questionable leader, planner, and business person.  One, because you allowed one person to make or break your team’s success.  Two, you failed to implement a knowledge transfer plan that mitigated your risk and elevated the growth and careers of others through that new learning.  Three, you either knew this was a risk and did nothing about it, or you had no clue.  I’m not sure which is worse but you're stuck so how do you handle the counter offer.

Why did the employee start looking?  It's OK to get solicited, it happens all the time.  But the employee had to pursue the position voluntarily if they have a job offer.  No one gets an offer without being interviewed at least to a moderate degree.  Not a problem, can’t fault anyone who is pursued from seeing where it goes.  But don’t let them off the hook with “they approached me I wasn’t looking for another job.”  Take the time to find out the drivers of the resignation and do your best to solve those issues as part of the terms of the counter offer.

Your best chance for success is to make the employee a part of the solution to the issues discussed.  Have them assemble a team, perhaps even cross-departmental, and get them invested in creating the answer.  If you can't get them to stay, try to work out a part-time evening or weekend transition to get you through the hiring process and/or critical projects that are coming due.  Be sure you know why you are making the counter offer and don’t fool yourself that it solved the issues.

And a final word about the team...the rest of the team is watching how you handle this so there are collateral implications to your choice.  And they are watching how you treat the person who leaves or accepts the counter offer and stays.  This is a huge opportunity to shore up your relationships with everyone and safeguard the stability of the group.  What’s your move when they come to you after hearing about the big raise you gave Suzy in her counter offer?  If you say no to their raise, guess what happens next?

Thirsty Thursdays are about our collective thirst for learning and knowledge.  It’s not about Beer:30 [although HR4ALL is all for that, too!]  We hope this weekly nugget of knowledge opens your mind and gives you a reason to pause and think differently.    Have a great weekend everyone! 

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