Should I make that counter offer?
An employee tells you they are leaving to move to another company. The question is: Should you make a counter offer or not? Ask yourself the following:
Does the individual in question contribute significantly to the team? Will they be hard to replace? Had they been earmarked as part of the company’s future success? These are just some of the questions that need to be confronted when faced with this situation. In deciding whether to make a counter offer, there are a number of considerations to be explored:
If they stay…
Evidence highlights that the employee will leave anyway within 6 to 24 months. In the vast majority of cases none of the things that drove the person to leave in the first place change after they accept a counter offer of increased salary. The reality is that the reason why most people leave a company is not salary. Career progression, a desire for more challenging work and work-life balance are often the driving force behind career moves. In the majority of cases, a salary increase will not solve the problem.
Other options to keep in mind
Properly understanding the person’s reasons for wanting to leave will help significantly. It is important to try and depersonalize your reaction to the information that they want to leave. Be honest and realistic about whether those reasons can be addressed without the person leaving. Have an open and frank discussion; ask them – do they like this business? Do they see themselves having a future with the company? If the answers are yes, look into options like giving the person a role that better plays to their strengths or offers a fresh challenge; explore flexible work hours; properly address communication or management issues that are negatively affecting performance or morale; hire a new junior to relieve workloads; outline the career progression path and where you see them in the next 2-5 years. Effective communication and real action are essential for this approach to be successful or the employee will eventually end up leaving.
When to counter offer with a salary raise
Taking the above points into account, you can still offer more money if you absolutely have to keep the person in the short term. This could be that you don’t mind if they leave once they’ve closed out that assignment, met that deadline or you’ve found a suitable replacement. Other factors when looking at a counter offer with a salary raise; maybe the current salary and benefits are below the market rate. You should benchmark your salaries against the competition or you will quickly lose more staff. Ultimately, if you believe they will have a big impact on the business in the future and you trust their motivations, and the information that they have given you, then you need to find a solution that allows them to stay.
Contact Staffworks so you can ensure you stand the best chance of hiring your first choice.