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Will Presenting a Counteroffer Get Them to Stay?

It’s inevitable: just when you thought things were running smoothly on your team, one of your key employees walks into your office and announces that he’s resigning. And if you’re like most managers, you’ll start to panic and wonder what you can offer to get him to stay.

Stop panicking. And squelch that urge.

While making a counteroffer to stop an employee from leaving is a common instinct, it’s really not a good idea. Here’s why:

  1. There’s a reason the employee was looking for another job in the first place, and that reason is probably not only about the money. Most people will stay in a job with a lower salary if they’re happy at their jobs. It’s when they feel bored, dissatisfied, unappreciated or like an outsider that they start to think about leaving. So, even if you offer them more money, those reasons will still exist. And yes, it stinks that the employee didn’t tell you before that he was unhappy (or did he? And you didn’t act on it?), but can you really change the person’s job enough to alleviate his dissatisfaction? If not, do you really want to pay more money to a dissatisfied employee?
  1. Were you already paying a fair or competitive salary? If so, then more money definitely isn’t the only thing that’s going to change the employee’s mind. Your salaries should be set according to objective market data, not in reaction to employees who are about to leave.
  1. It sends the wrong message to other employees. Do you want this person’s colleagues finding out that he’s getting paid more than they are, just because he threatened to leave? If word gets around that all it takes to get a big raise is to quit, you’re sure to see an upswing in resignations.
  1. It’s sure to change your relationship with that employee. So you successfully counter the employee’s other offer and persuade him to stay. Now what? Will you still be able to trust that person? Will other people? And looking at it from the employee’s perspective, you’re now the company that he had to threaten to leave in order to get what he wanted. That’s not good for either of you. Look at it this way: the rule of thumb among recruiters is that 70 to 80 percent of people who accept counteroffers either leave or are let go within a year.

Now, obviously there must be times where making a counteroffer makes sense and works out—but they tend to be the exception, not the rule. So if you were unsuccessful in squelching your instinct about making a counteroffer, be very careful and try to think through the downsides.

And if you decide not to make a counteroffer, you still don’t have to panic about hiring a replacement. Just call Synerfac. We’d be glad to talk to you about your engineering and scientific staffing needs!