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Making them and taking Them - Why counter-offers are a bad idea

4 May 16  | Business Support |  HR & Talent Acquisition |  Recruitment News
Making them or Taking them – Why Counter-Offers are a Bad Idea for Everyone
 


Counter-offers: they’re a minefield. For both sides, employer and employee, negotiating the murky waters of resignations and counter-offers can be both difficult and nerve-wracking. 

Why you shouldn’t make a counter-offer

When an employee offers their resignation, it can be tempting to make an offer to try and convince them to stay with the company. A little more money, a few more perks or even a new title – surely they’ll revise their decision to jump ship, right?

Maybe, but the question that really needs to be asked is whether it will be worth it in the long run. 

  • You now know that this employee is not particularly committed to the company – who’s to say they won’t be tempted by another offer in two months? Then you’ll be right back where you started; losing the staff member or offering yet another raise/perk/promotion to convince them to stay. It’s the beginning of a long, slippery slope.

  • If an employee lacks commitment and loyalty, will they continue to give their best to the job? It’s unlikely, and very unlikely that they’ll go above and beyond their remit, as a truly engaged employee would. 

  • Many people quote statistics that ‘90% of those who accept a counter-offer have nonetheless left within 12 months’, or something similar. While these stats seem to have been pulled from the ether in many circumstances, and a source is nowhere to be found, the general consensus is that those who take a counter-offer don’t hang around much longer. They’ve often already checked out mentally, and even if not, they’ve been looking at the market and they know there are other, maybe better, things out there. While they might stick around for another 6 or even 12 months, they will almost certainly be moving on soon.

  • Making a counter-offer to convince an employee not to leave can cause ill-feeling amongst the rest of your staff. Some might feel slighted that they have not received a pay rise or similar, while others might feel that their colleague is benefiting from displaying a lack of loyalty. It may also make your other employees view you more negatively, as they may see your counter-offer as a capitulation to the demands of their colleague.

  • You might end up paying over the odds for an employee who has already demonstrated that they don’t feel any particular loyalty towards your company. As long as you’re paying a decent rate, comparable with the market rate for such a position, you shouldn’t need to pay more unless the employee is bringing something exceptional to the table. Wouldn’t it be a better option to let that person leave and take their new opportunity, and then find someone new and pay them the correct market rate for the same work, rather than increasing the first person’s pay, not because they’ve improved their offering, but for no reason other than that they’ve been offered work elsewhere?

  • An employee who has seriously considered leaving is often less engaged than his colleagues, which can be contagious. A disengaged staff member can spread his discontent disconcertingly rapidly – after all, misery does love company. Let the unhappy employee move on to somewhere else and they’ll hopefully be happier and you safeguard those who remain at the same time. 

  • Similarly, a staff member who has gotten to the point of handing in a resignation, only to be convinced to stay, has the potential to give a negative impression when representing the business. An unhappy employee is difficult to hide, particularly if they deal directly with customers or clients. While they’re unlikely to say anything actually negative about the company or organisation, their enthusiasm and commitment has been compromised and this can be very obvious, despite the employee’s best efforts. 
Why you shouldn’t take a counter-offer

If you’re thinking about taking a new job, but you’re reluctant to leave the company you’ve grown comfortable with and don’t fancy learning a whole new company’s processes, accepting a counter-offer might seem quite attractive. After all, what you really wanted from a move was more money anyway, and if you could get that and stay where you are, why wouldn’t you? 

Here are a few reasons why you really shouldn’t take that counter-offer:

  • Your boss now knows that your loyalty is wavering. If you accept a counter-offer, particularly one based entirely on financials, they now also know that your loyalty is bought, not earned. This could impact your relationships at work and even the opportunities you are offered: why would your boss offer you the choice new project/contract/training, when they know that there’s a good chance that you’re no longer committed?

  • Your co-workers are likely to resent you. There’s a good chance that they’ll view the outcome as you having thrown your toys out of the pram and the boss running to pick them up for you – they may even have less respect for the boss who capitulated to your demands. Counter-offers can cause a multitude of negative emotions, from jealousy and resentment to downright anger, and as mentioned above, many who accept a counter-offer leave soon after anyway, so it might be worth just handing in that resignation, saying a polite but firm ‘no, thank you’ to promises of promotion or financial entreaties to stay and avoiding all the bother.

  • Where is the money for the counter-offer coming from? Most companies have wage and salary guidelines to be followed, so if you’re getting an unscheduled raise, you need to wonder whether what you’re in fact getting is your next scheduled raise, a little early? If this is the case, you’re obviously not benefiting much from the raise, other than a couple of extra months on the higher salary.

  • Being paid above the market rate might affect future career moves - you may struggle to find an opportunity which will represent a pay rise in the future. 

  • If you’ve had to resort to handing in your notice in order to get a pay rise, are you sure that you want to stay with this company or organisation, even if they do cough up the extra cash? It might be a better idea to cut your losses and move on, to a place where hopefully you’ll be appreciated and rewarded for your hard work without needing to descend to threats of leaving!

  • When someone starts looking for a new job, the cause is rarely the desire for more money.  Usually it’s far more complex than that, regardless of what they may tell their boss as they leave. Often, it’s about personal relationships, such as not getting on with a manager or colleague, or about needing more responsibility or scope for personal development. Sometimes it’s a need for more flexible working options, or a desire to relocate. Most counter-offers are simply offering a raise, and in these cases while more money might be attractive, it won’t solve the underlying problems that caused you to want to leave. Before long you’ll be feeling the same way but with the added pressure of having accepted a raise, making you feel that now you can’t leave. 

Once an employee has gotten to the point of feeling that they need to resign and move on, a counter-offer is, at best, a bandage on a broken leg. It’s usually best for both sides to shake hands, say ‘thanks for the good times’ and go their separate ways – new opportunities are everywhere. 

CBSbutler’s specialist BMS consultant Aaron Lansiquot thinks counter-offers are rarely a good idea – it’s too little, too late. Aaron believes in keeping your staff happy enough that they don’t want to resign, and if they’ve gotten to that point, let them go: counter-offers simply prolong the situation and leave you in the same circumstances, only a year later. You’re better off saying goodbye while things are still sweet, and looking for another opportunity: for the employee, it’s the opportunity to try something new; for the employer, the chance to try someone new!

Aaron's published a post on LinkedIn Pulse about how he can help negotiate the confusing landscape of counter-offers - check it out here!

Whether you need help finding a new role or filling one, give CBSbutler a call on 01737822000 for a confidential chat about your needs and how we can help.

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