The Employer’s Concerns
There are a number of concerns that management has when contemplating counteroffers:
The offer as a precedent. What will be the effect on corporate compensation and benefits and perks programs. Will the counteroffer throw all those programs into disarray?
Lack of privacy—transparency. Privacy is generally not an option—the work will get out.
The loyalty question. Bob has quit, accepted an offer, is part of a new team. What does that say about his continuing loyalty to us? Can we get it back? Maybe not, but you can just as easily say he’ll be fine since the problems are cured, Csizmar says.
Morale Issues. How much can you offer, without raising someone else’s ire. Be careful that your solution doesn’t create more problems to deal with tomorrow, Csizmar warns. Always consider the bigger picture.
How short is the fuse? You may not have much time to prepare a counter offer. If two weeks’ notice was given, you’ve got no more than a week to come up with offer. Bob doesn’t want to change his mind at the last minute. Some “Bobs” will refuse counteroffers because they “gave their word” to the new company. At some point, Bob will pass the point of no return.
Spouse. The role of the spouse is important, and, unfortunately, you usually can’t talk to the spouse.
The Employee’s Viewpoint
Bob’s gone through all the thought processes of comparing the old job and the new job and made a decision and a commitment to the new employer. That’s hard to break through.
Bob knows that whatever you’re offering, it’s under duress. He knows his loyalty will always be questioned and that means his future prospects are limited. So he’ll probably look at it as a short-term situation.
Bob had a reason for putting his resume out there:
- Deadend job
- Boss an idiot
- Passed over for promotion
- Perceived negative treatment (discrimination, harassment)
- Pressure from home
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Whatever the reasons, your counteroffer must address them. If you rely on pay to be your babysitter, you’ll get burned, says Csizmar.
As an example, one client’s employee revealed that the reason for her resignation was too much travel. There was no money issue. The company was able to revamp the job to substantially reduce the travel, and the employee happily stayed.
This is an example of why it’s so important to know what’s going on in the employee’s head, Csizmar says.
So … Should I?
No question, the counteroffer is a good tool to have in your pocket. But you have to listen to the background noise—the grumbling of other employees, the toll on your compensation systems.
In my view, says Csizmar, counteroffers are generally not a good idea, because there are too many downsides, but there are exceptions, and if the company’s future is at risk, the counteroffer may be the best way to go.
Counteroffers—a tricky business, but just one more thing to add to the list of compensation challenges. “Maintain internal equity and external competitiveness and control turnover, but still meet management’s demands for lowered costs.” Heard that one before?
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It’s the precedent that usually concerns me the most. And when you combine that risk with the others you outline above (particularly loyalty and morale), it almost always points to counteroffers being a counterproductive move in the long run. As you say, the better approach is succession planning.