Here at Finders, we see our candidates getting counter offers more and more often, particularly in the banking sector. We thought it would be a useful topic to focus on from a client perspective.
Should you make a counter-offer “as standard” to your employees when they come to resign – is there a right or wrong answer?
Keeping a valued employee happy and loyal could be worth your while but what are the upsides and downsides of doing so? This will of course involve negotiation and perhaps set a precedent. Is the employee really an integral part of the team and their skill set hard to find? Is this really worth the effort when statistics show that more than 50% of those counter-offered will go on to leave the company within the next six months? Either the counter offers are simply not attractive enough and need more work, or many see it as preferential to seek new talent into the business.
One of the key elements to look at first is what prompted the employee to look externally? Many “offers” simply involve money, but we know from research into WHY people resign that this is not the only or often primary reason for resignation. Work life balance, relationship with line manager, career opportunities and recognition are as important if not more so in some cases. Our best advice is therefore to focus on non-financial benefits first such as the core values of the company, the flexibility in the work place e.g. working from home, having personalised mentoring and perhaps offering further training. By all means go on to match the offer with a counter-offer financially if this won’t get your pay roll out of kilter, but in the long-run this will not change the situation if other needs are not met.
Another factor to consider is will this employee really continue to perform at their previous level if you end up persuading them to stay, how aligned are they now with the company strategy and values? Whilst it might be flattering to be counter-offered – won’t the root reasons for looking elsewhere re-appear?
Our experience as well as global statistics have shown that generally-speaking, it is best to part ways amicably and think twice before making that counter-offer. During an exit interview you can gain valuable insights and perhaps think about any internal problems that are driving your best staff away more frequently and are there ways of fixing things from the inside?
In summary, whenever a valued employee leaves, you do well to ask yourselves WHY and WHAT could be done better in terms of leadership, career path, remuneration, recognition and above all the strength of your relationship with this individual. Losing the good ones is a hole in your employment bucket that you will want to fill fast!