The Risk of Making a Counteroffer

The Risk of Making a Counteroffer

How Poor Recruitment Can Hurt Your Brand

The Risk of Making a Counteroffer

Making decisionYou are having a great week; that is until one of your best employees walks into your office to announce resignation. Many managers in this situation will launch into immediate panic and start trying to come up with ways to keep this employee. Making a counteroffer is the first thing that comes to mind; however, this may not be your best option.

Making a counteroffer in order to stop an employee from taking a job offer elsewhere is hardly ever the right thing to do.

Here are a few reasons why that is:

    • The employee was seeking another job for a reason. Although an increase in income is often a major motivator, other factors are also considered when someone is looking to leave their present job, including personality conflict, boredom and general dissatisfaction. All of these issues are bound to resurface eventually. Therefore, you should refrain from making a counteroffer to keep an employ that is dissatisfied.


    • The employee was already receiving fair compensation from you. It is important to pay your employees competitive salaries always, not just when they are considering resignation. Salaries should be set based on objective market data, not in reaction to someone who wants to leave.


    • Other employees will get the wrong idea. Word will inevitably get around that the way to get more money is by threatening to resign. Before long, you will have employees lining up outside your office door with resignation letters in hand. You do not want employees having a foot out the door just to get more money out of you.


    • Your relationship will be forever changed. If you persuade an employee to remain with a counteroffer, that employee can no longer be trusted as part of the inner circle. You become the employer that had to be threatened in order to get what he or she wanted. In addition, research shows that seventy to eighty percent of people who accept counteroffers are either let go or leave anyway within a year.

This does not mean that sometimes making a counteroffer will work for the best. However, such cases are generally an exception to the rule. At the very least, remain cautious and consider all of the downsides before you make a counteroffer.

The Secret to Recruiting Rewarding and Retaining Talent

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