Shopping cart

close
Member News

ACG Resources | Should you extend a Counter Offer to an Employee who resigns?

Most employers are increasingly concerned about the retention of key and non-key employees. When an employee leaves, it can be expensive to replace them, not to mention the loss of productivity and knowledge.

A recent study has shown that many currently employed workers are unhappy in their current position. Some of the primary reasons for this unhappiness are the general feeling of being unappreciated and the thought that the grass is greener elsewhere.

Given this situation, some sectors may experience a talent war. As this occurs, it becomes quite common for employers to offer counter offers as a measure to stop top performers from leaving.

Offering or accepting a counteroffer rarely ends well, either for the employer or the employee. In over 40 years of practicing in the Search and recruitment industry, I cannot point to one instance where the acceptance of a counteroffer was advantageous to either side (Employer or employee).

Let’s dissect how the counter offers work and what the result is for the offering organization.

First, when an employee tenders their resignation, they are generally doing so because they accept a new position, which may provide them with an improvement over their current situation. This improvement may be in the form of higher salary, title, location, working conditions, responsibilities, or all of the above. In general, when an employee is entertaining a new offer, they do so because they have become disenchanted with their current employment for one reason or another. As a recruiter, I will not be so bold as to believe for one moment that my skills or the skills of my team (Or industry as a whole for that matter) are so good that I (we) can convince someone to entertain a new position if they are 100% happy where they are working. As much as I would love to believe that I have that power, I can say that in all cases (even when recruiting a passive candidate), there is always something that the employee would like to improve. As recruiters, we probe to find out what that “hot button is” We do not create the dissatisfaction, we only identify it. If the employee is delighted with their current employment, they would not consider exploring a new opportunity.

With this being the case, when the employee reaches the point of tendering their resignation, their employer is generally shocked, amazed, and possibly even angry.

As an employer myself, when an employee resigns, several thoughts immediately come to mind: 1. Why is he/she leaving?

  1. What intellectual property is now going to walk out the door?
  2. How will this resignation impact my organization and workflow?

In almost all cases, the timing of a departure is often not advantageous to the employer. Thus, the gut reaction (except in cases where the employee is one that the employer is happy to see go anyway) is to keep the employee. While this may seem to be the best idea for an organization, it may not always be the case.

First of all, if the employee is unhappy enough to entertain a new offer and take it to the level of acceptance, there is generally an underlying problem. Even if that underlying problem is solved, both the employee and employer will never forget that resignation was tendered and took getting to that point to resolve the issue.

If the issue is only a salary issue, and the employer offers to match the salary or improve upon the offer to keep the employee, imagine the havoc this can cause to budgets if all the other employees get wind of the situation. (Never mind telling the employee not to tell anyone, the company grapevine is always incredibly fast)

If it becomes known that as an organization, you are easily held up for increases in comp or other benefits, you will have a resignation every week. Unless you are prepared for that eventuality, I strongly suggest against it as this will create untold difficulties for your company.

The bottom line is as an organization, foster an environment of OPEN communication. Identify potential issues with your employees BEFORE they become unhappy and vulnerable to another offer. This is not to say that employees will never leave. However, if you want to keep turnover low, COMMUNICATE. However, do not allow your organization to be held up (employees do bluff sometimes as well!). As I have advocated, even with my career, when a decision is made to walk through a door, be sure to keep walking. Remember that just about everyone is replaceable, even if we do not believe it at the moment of resignation. There are very few employees whose skill set cannot be duplicated.

  • Len Adams, CEO, ADAMS CONSULTING GROUP, LLC

Compliments of Adams Consulting Group, LLC – a member of the EACCNY.

Scroll To Top
We use cookies to improve your experience on our website. By browsing this website, you agree to our use of cookies.