Employee Retention – Avoiding the Counter Offer
Most of the time, when a resignation letter lands on your desk, it’s a surprise. You’ve worked hard to focus on employee retention and were not expecting one of your best employees to resign (who you thought was happy and satisfied). Your mind starts to spin, and lots of questions start filling your head.
Questions like: “How long had they been planning to leave?” or “What aren’t they getting from this workplace that made them want to look for something else?” They all start swirling and building on each other, and all you can think is, “How can I fix it?” Counter offer! Abort quit sequence!
Employee retention is always a point of stress for business owners. But every time any employee quits, it still has an element of shock (and a dash of panic, now that you’ve got to replace and re-train a new person.)
So, what do you do when one of your valuable team members quits?
And when it comes to employee retention strategies for this situation, what advice is out there?
Let’s look at the reality of the situation. Your initial reaction might be knee-jerk: counter offer with more money, flexibility, whatever it takes—and offer it NOW. Making a counter offer seems like a good idea in the midst of the busy season when you really don’t have the time or resources to invest into training someone new. But when you think about it, making a counter offer actually might not be the best employee retention strategy.
Here’s why:
- YOU’VE EXPOSED HOW MUCH YOU’RE UNDERPAYING
When your first reaction is to offer a sizable pay increase, it communicates that you could’ve been paying that employee more the whole time they worked for you—but you didn’t. Even if the employee does accept your counter offer, there might be underlying resentment that only prolongs an already damaged relationship. It’s better just to let the employee move on.
- THERE’S PROBABLY MORE THAN ONE REASON THEY’RE LEAVING
When people make the decision to quit, there’s usually not just one reason behind the decision. If that were the case, there’d be far more positives to the job that would outweigh the one negative, and the employee would stick it out. Instead, there are often several reasons behind the choice to leave—and the employee has thought long and hard about them.
A recent LinkedIn Survey showed that the top three reasons for leaving a job were: 1) Advancement opportunities, 2) Better Leadership, and 3) More money. But for many who take the time to write a resignation letter, it’s probably a combination of all three. A counter offer is not a consolation prize to someone who’s already mentally checked out–and for you, it’s not a good employee retention strategy. Don’t fight for the ones who are already gone.
- YOU MIGHT ALREADY HAVE SOMEONE ON STAFF WHO’S A GOOD REPLACEMENT
When one person leaves, it creates an opportunity for you to re-evaluate your current team and see who might be due for advancement or a new challenge. Before looking externally for a replacement, look internally and see if there’s someone who already knows the core of your organization that might be a good fit—loosing one person might actually be the best thing that ever happened to one of your other employees!
- THEY NEED SOMETHING DIFFERENT—SOMEWHERE ELSE
The old breakup scenario of “It’s not you, it’s me” applies here. When an employee musters up the courage to tell their boss “I quit,” it’s not because they want a raise, different responsibilities, or greater flexibility with your company—they want it from somewhere else. If they really wanted to stay but needed something from you, don’t you think they’d ask for it before starting over from scratch? If you love them, set them free!
- COUNTER OFFER COMPROMISES CAN BUILD RESENTMENT WITH EXISTING STAFF
Word travels quickly when someone says they’re quitting. But if other employees hear that now the quitter is staying, those other employees are going to want the same. So where you think you’ve solved one problem, you’ve actually created many more. Office culture and team morale is a huge part of the day-to-day working environment, and while it sounds petty, counteroffers can have a huge impact on your whole team.
The next time one of your team members calls it quits, don’t jump in with the compromise. Grit your teeth, don’t burn bridges, and wish them a successful career. Forgo the counter offer, and focus on employee retention with your team members who want to be there. Know that there are more fish in the sea—and this might actually be a fantastic opportunity for changes and growth. You’ll get through it.