What do you do when an important member of your team gives you their resignation? Do you let them go or do you make a counter offer? When the job market is busy and there are not as many qualified individuals to fill the positions we start to see more counter offers. As the unemployment rate declines in Alberta we will see this strategy used more regularly by management to retain key employees, the real question is whether or not it is worth it. No one likes to loose valuable employees, but the reality of a counter offer is that should it be accepted it might buy you 12 months before you are filling the position anyways. So I thought we should go over some of the things you will want to think about prior to making the counter offer.
- When a person comes into your office to resign, chances are that they have reviewed their options and carefully made that decision. If they are acting on impulse, you might want to question their reasons for leaving in the first place.
- Most people leave their boss, not their job. Money is rarely the number one reason why a person has decided to look for new employment. During our interviews, the reasons given as to why they are looking for employment are; advancement opportunities, companies closer to home, personality conflicts in the office, or something has dramatically changed in their life that requires the change.
If this individual has given their decision a lot of thought, chances of changing their mind are slim. But let’s look at possible scenarios that could happen if they accept your counter offer.
- Your initial reaction was to keep this person no matter what, now you are feeling like you were forced into raising their salary. Chances are you will become unhappy with everything that person does as you feel resentment towards them.
- The trickle-down effect, other people in the company are aware of what happened and are now feeling like they deserve more money.
- The individual who accepted the offer remembers what it was that they were looking for, besides the money, and leaves within 12 months. Although there are not any statistics to support this, many experts believe that 12 months is the average time you will continue to retain the employee.
Of course you could be one of the lucky ones, where the person really just did want more money and they maintain their valuable employee status as a productive member of the team. In my experience in dealing with counter offers, every person that has accepted them has regretted that decision and the relationship between them and their manager went bad.
The harsh reality is that even though they may be an important member of your organization, you should thank them for their time working with you, let them know they will be missed, ask them to put together a transition plan, and see if they would recommend anyone for their position. In the long run by letting the employee leave, you will maintain a positive respectful relationship with this individual.
What has your experience been with counter offers?