EMPLOYMENT COUNTER-OFFERS: TO DO OR NOT TO DO

The question of counter-offers is certainly not a new one. However, in today’s labor market it is worth looking at through a different lens. This includes looking through the eyes both of employers and candidates of employers and candidates who are offer recipients.

• The perspectives I bring to this issue are based on a career of experience as a CHRO & for the last 10 years as a Search/HR Management Consultant.

Let’s look first at an employer’s lens. At some point, almost every employer has experienced or will experience a highly valuable person submitting their resignation. Too often, this occurs with the employer being surprised.

• One way to avoid (or at least minimize) being blindsided is to do conduct “stay” interviews. Think of them as checking the barn door before a valuable racehorse gets out of the stall & stable, whereas exit interviews identify how to possibly prevent it happening with other valuable racehorses.

THREE COMMON REASONS WHY COMPANIES MAKE COUNTER-OFFERS

1. In general, companies do not like to be “fired” by an employee, which, in effect, is what a resignation equates to or is perceived as.
2. They realize the individual is more valuable than they have demonstrated
   • Including pay, which is the common currency in business (along with title) to convey worth
3. They recognize they have failed to provide an employee with the appropriate reasons to stay, including:
   • Supervisors/managers/executives who understand and practice good leadership skills, including:
     • Trust (being trusted & trusting), communications, teambuilding, collaboration
   • Career/professional development
     • Today’s individuals (especially millennials) are accused of not being as loyal as prior generations. Actually, they have a high degree of loyalty to their careers & to those companies which satisfy their desire for professional development
     • Remember they saw or heard about their parents or grandparents losing their jobs after years of service as part of a reduction in force
   • Work-life balance, including schedule flexibility
     • Research shows many in today’s workforce will trade dollars for time off!
   • Pay & Benefits
     • This needs to be viewed as merely as “the price of admission to the employment game”.

HOW DOES AN EMPLOYEE WHO HAS ACCEPTED AN OFFER REACT TO A COUNTER-OFFER?

• YOU MAY THINK IT’S AN OFFER THEY CANNOT REFUSE…BUT

HERE ARE THE TYPICAL REACTIONS:

1. No thank you because:
   • “I have made a commitment to this new company & I keep my commitments.”
   • “My decision to leave is about more than just my compensation.”
   • “It’s too little too late.”
   • Or
   • Without saying it, they are concerned that going forward the company will purposely or sub-consciously view them less positively, & this will have an adverse impact on their career with it.
     • This is not necessarily an unfounded concern. It is not uncommon for a company to decide to ensure it will not be got off guard again by: a) developing someone to be ready to take over or b) starting a confidential search to find a replacement for that employee.
2. Yes, I’ll stay because I really did not want to leave.
3. Don’t smile yet! Here are statistics for employees who accept a counter-offer to stay:
   • Within 60 days, 50% of employees are actively looking again.
   • In 6 months or less, more than 50% of them will end up leaving – usually for the same reason(s) they initially were going to.
   • Only 15% will stay for at least 2 years afterward.

Author: Salvatore LoDico (The HR Godfather ^TM) 

Senior Partner, Spuhler Associates/Founder & CEO, Trinity HR Consulting, Inc