Should I Make a Counter Offer?

May 10, 2019

For every candidate I advise to avoid the lure of the counter offer, I would say the very same to a client. When someone tells you that they are leaving to move to another company, is it wise to make a counter offer? Well, that depends and there’s lots to consider before you do anything hasty. 

First Things First  

Why are they leaving? Maybe they’ve been offered an opportunity they cannot refuse, or perhaps have you dropped the ball? Maybe this employee has been neglected or has a difficult manager. Now they’ve stepped into your office and dropped a resignation bombshell that you didn’t see coming. You’re suddenly realising the gap that will be left in the organisation were they to go. Avoid panic stations – stop and evaluate the full situation before making any decisions.   

In business people will come and go. But if this employee is considered ‘indispensable’, is moving to a direct competitor, has a unique skillset or has been earmarked for succession planning, it can be a bitter pill to swallow.  

Ask The Difficult Questions  

Even though it’s an emotional time it’s important to have clarity. Are you able to ask your employee, with all things put aside, do they enjoy working for you (and the business)? If you can address their concern(s) and increase their salary or put them on a promotion plan or whatever it may be, do they see themselves staying with you in the medium to long term? If it’s a no the conversation should end here. 

So You’ve Decided To Counter  

Statistics overwhelmingly show that employees who accept counter-offers are typically gone in about six months. Bearing this in mind (and before you jump head first into making any promises), you need to really understand their reasons for leaving. Depending on those reasons you may or may not be prepared to negotiate. Money is a motivator for some – but not for all. Career progression, a new challenge, better working environment, promotion, work life balance… the list of possible motivators goes on. Are you able to deliver on a promotion promise? Can your business really facilitate someone on flexible working hours?  

Money Talks   

If it’s just cash, then this can potentially be a quick decision but be mindful this is often just a short-term fix and the very same problems will arise again and again.   

Can you afford the raise? Can you afford to train up someone new or be without an employee? There’s a myriad of reasons why someone may look for more money. Are you paying below the market value for their skills and experience? Do their personal circumstances mean they can’t survive on their current salary? Or are they just leveraging…   

Importantly, be wary of creating salary chasms within your teams and bear in mind if you start benchmarking this can prove risky in a competitive talent market.   

Best Wishes  

If a valued employee resigns and you can have a frank conversation and can reach a satisfactory long-term common goal allowing them to say, then a counter-offer can be mutually beneficial. Bravo!  

Often though you will be recruiting for their position sooner than later so be sure to weigh everything up. If your best employee must leave your company to achieve their career goals; shake their hand and wish them all the best. They’ll remember you fondly for not standing in their way.