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Recruiting Roadmap: When to Counteroffer

Recruiting Roadmap: When to Counteroffer

by Ryan Joseph

Because employees choose to leave for a variety of reasons, only certain ones are ideal candidates for a counteroffer

A star employee drops a bomb on you and puts in their notice. Feeling frustrated and nervous about losing their skillset you naturally ask yourself: “Should we try to negotiate a counteroffer?”

On the surface, it seems like the best possible solution, because a few extra dollars now can protect the company from a multitude of turnover related pains and costs; however, while finding a way to keep an employee may be in the best interest of a company, research shows that 80% of people who accept counteroffers still end up leaving the company within six months.

Candidates typically make job moves for multiple reasons, but finding out their prime motivator will usually show if a counteroffer is the correct long-term play; thus, asking questions to reveal how and why an employee made a decision to leave is vital.

Here are three of the most popular reasons for employees to leave – only one of which is an ideal candidate for a counteroffer.

 Reason for Leaving: Professional growth. In this case, a new opportunity may make a candidate feel more well-rounded, it offers them career development, or it aligns with their ultimate career goals. In their current organization, they are happy overall, but room for growth is not there.

Counteroffer? Unfortunately, there is little that can be done to successfully keep this employee, as more money will not fill their long-term career development goals.

Reason for Leaving: Frustration. An employee may feel there are issues in their current company or role that are unsolvable. These can be deep-rooted or sometimes as simple as an altercation with another employee. Either way, these frustrations push them to discover external opportunities.

The first interview that an employee takes with another organization is like an window opened into a new world. Even if the position is not ideal, he or she just got a taste of something different, new, and exciting – maybe it was more paid time off, better hours, or even more resources. After a few interviews with other companies, an employee may start to think maybe the grass might be greener somewhere else, and their desk chair becomes a little less comfortable than it used to be, or the coffee does not taste as good. Overall, their patience for the normal trials and tribulations that occur in every workplace gets a little thinner.

Counteroffer? In this case, offering a higher salary is like putting a band-aid on a deep cut – at first, it is going to solve the problem, but overall, it is not going to solve the fundamental reasons that led someone to leave a company. More money may cloud an employee’s judgment initially, but realistically, the vanity will wear off over time. Even if they accept a counteroffer, the next time a small frustration arises, flashbacks to the other opportunities may leave the candidate feeling regretful and they will feel pushed to start interviewing again.

Reason for Leaving: Financial. In today’s competitive market, attracting talent is not easy. Companies are often throwing money at candidates.

Counteroffer? If there was ever a case for a counteroffer, this would be the prime scenario. When an employee makes a move solely for more compensation, their heart is not in it. They can get tunnel vision over the dollar signs, and when they go to resign, refusing a counteroffer will be very tough for them. Candidates solely seeking higher compensation often do not know how to ask for a raise and try to avoid confrontation, so this is the only option they see fit. They typically feel appreciated and valued when they go to resign and their company really vies to keep them.

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