Should I Extend a Counter-Offer?

It happens too often in today’s market: Gainfully employed individuals are lured away from their employers with the promise of higher salaries, more growth potential, greater responsibility, fancier perks…

…and when it happens to you, it can feel like a punch in the gut – especially if the employee is a star.

The candidate market is tight, so when a talented team member gives their notice, fighting for them to stay may feel like the best way to save yourself the time, money and headache of replacing them.

But hold on a second.

Is extending a counter-offer really your best move? Let’s look at the pros and cons:

Pros of Extending a Counter-Offer:

• You may be able to keep a superstar. If the employee has difficult-to-find skills, is an integral part of your team, and is truly worth the money, it may be worth the effort and expense to try and keep them.
• It gives you time to search for a replacement. If you absolutely cannot afford to have a position remain vacant, countering buys you time to recruit the employee’s replacement. This is also important if your performance is evaluated on whether you keep your team fully staffed.

Cons of Extending a Counter-Offer:

• You may no longer trust the employee. If they accept, you may question their loyalty moving forward. Sure, the employee is staying with you – for now. But for how long?
• Coworkers may be resentful – toward their fellow employee, for manipulating you to get a raise, and toward you, for paying up to keep a disloyal employee.
• The employee is still stuck in the same job. If they were unhappy enough to pursue another opportunity, will more money really make them happier and more fulfilled?
• It sets a precedent. People talk. Your employee will tell coworkers that they received a counter worth accepting. This could create the expectation that resigning = pay raise.

As you can see, there are both potential benefits and drawbacks to countering an employee. So, when an employee gives notice, take a moment to consider the following:

• How valuable is the employee? Do you honestly believe they’re indispensable – or are you just avoiding the inconvenience of replacing them?
• What’s the real issue? Is the employee simply overdue for a raise – or are they truly dissatisfied with their job or your culture? If it’s the latter, throwing money at the problem won’t fix anything.
• Would something besides money be a more effective retention tool? If the employee is looking for greater work flex or a shorter commute, consider offering telecommuting or more flexible start/stop times.

Extending too many counter-offers?

Recruit better candidates – ones who fit, perform, succeed and stay – by partnering with a national staffing firm like PrideStaff. Contact us today to learn more about our On Target fulfillment process.