It’s the Great Resignation of 2022. 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 counteroffer? When the job market is bustling and there are not as many qualified individuals to fill the positions, we start to see more counteroffers. As the unemployment rate continues to decline slowly 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 lose valuable employees, but the reality of a counteroffer is that, should it be accepted, it might only buy you an extra 12 months with that employee before you are filling the position again. So I thought we should go over some of the things you will want to think about prior to making a counteroffer.
● 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 being closer to home, personality conflicts in the office, or something has dramatically changed in their lives that requires the change.
If this individual has given their decision a lot of thought, the chances of changing their mind are slim. But let’s look at possible scenarios that could happen if they accept your counteroffer.
● Your initial reaction was to keep this person no matter what, and now you are feeling like you were forced into raising their salary. You will most likely 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 after the counteroffer is accepted.
Of course, you could be one of the lucky ones, and the person really just did want more money and to maintain their valuable employee status as a productive member of the team. But in my experience, this isn’t the norm. What I have seen is that every person that has accepted a counteroffer has regretted that decision in time, and the relationship between them and their managers turned sour.
The harsh reality is that, even though they may be an important member of your organization, you’re most likely better off letting them leave. 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 . In very rare occurrences an employee may decided to stay with the company even when a counteroffer is not extended. At that time you, the business owner or manager, have a decision to make. Do you let them stay? Ask yourself these questions;
● Is the other offer legitimate?
● Are they just trying to get a raise?
● Why did they choose to look for other work?
● Will they do this again when something changes that they don’t like?
● Is this the type of person or behaviour that you would like to be a part of the office culture?
In my experience, an individual who is serious about leaving one position for another has a reason for that change. Whether they were vocal about it or silent. Unless you know what that reason is and how or if you want to change it, it might be best to let them go and tell them you will be reference for them. Your other employees can see how you are handling the situation. What you do with one employee sets precedent for what others will expect. Be careful in what precedent you set.
What has your experience been with counter offers?
