Should I Make A Counteroffer To Retain My Employee?Jun 22, 2022
Your employee puts in their notice. They tell you that they've received a better offer.
This is the last thing you wanted to deal with today.
You know the time and effort it takes to hire and train new employees. Your first instinct may
be to give them a counteroffer–but should you? Here are some things to consider before you do:
It May Not be About the Money
Offering an employee more money in order to keep them has been an effective retention strategy that employers have used for decades. However, with the pandemic and the "Great Resignation", things have changed in recent years.
According to a recent survey conducted by the Pew Research Center, money plays a role, but other factors like flexibility, child-care issues, and overall company culture are just as important to employees when deciding to move on. Offering your employee more money is only a temporary solution and doesn't address other possible reasons the employee has for leaving.
A Counteroffer May Decrease the Morale of Other Employees–And Your Bottom-Line
Offering an employee more money to stay is something that will most likely not be shared with your other employees. However, if you offer the employee other benefits, such as more flexibility or even a promotion, it could have a negative impact on the morale of your other employees.
If the resigning employee has been talking to other employees about their dissatisfaction with the company and receives a job promotion out of the blue, most employees will figure out what occurred. Employees who have been doing a good job hoping to receive a similar promotion may become disengaged. Weighing the benefits of retaining one employee versus the morale and engagement of the overall team is very important. According to a recent Gallup Poll, a company with engaged employees is 21% more profitable. Managers making a counteroffer need to do so thoughtfully and carefully weigh these factors.
In today's rapidly changing world, turnover is to be expected. To avoid the headache of hiring new employees, employers can implement forward-thinking strategies like regularly checking in with employees; offering opportunities for advancement; and offering more flexibility.
However, if an employee has recently resigned, there is no need to panic. There are still great candidates out there looking for positions, and your organization just might be the perfect fit. Our staffing company interviews and vets qualified candidates every day. Even if you're looking for a replacement for higher roles, such as VPs and Mid to High-Level directors, we can help. Whatever recruiting challenges you are facing, there is a solution. Schedule a no-obligation call using our calendar and we can talk about your hiring needs.
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