As an Employer, Should I Make a Counter Offer to a Resigning Employee?

a counter offer to a resigning employee

You get the sense from the first moment – they have something to tell you and it is not good news.  There is a pause, followed by a deep breath.  You hear words like “decided” and “offer too good to refuse” and “really sad to leave”. Your brain is running at a million miles an hour.  Think!  Think!

  • How can I turn this situation around?
  • What can I offer?
  • Should I make an offer?

Most business owners have been there at some point or another.  So what should you do?

When an Employee Resigns…

There are a few things to bear in mind when considering this scenario.  Hopefully, you are reading this on a calm morning when your mind is at its most rational state.  When a good employee resigns unexpectedly, it can be a highly emotional situation.  Why are they leaving?  Why are they leaving me? First of all, don’t take it to heart.  I’m not going to tell you it’s not about you, because most of the time it is (at least partially) about you, in the sense that if you run the company, by default you have the biggest influence over staff retention – whether you like it or not.  At the same time, people will eventually leave to do something else. However, this brings to question, the topic of staff retention. The question is; for that individual staff member, was it a negative  result for them to leave and could you have prevented it?

Why Employees Resign

I have spoken with a lot of people who are considering leaving a company I partner with, or who have left a company I partner with, or who are doing the same thing at another company and are considering joining ours.  I read a lot staff surveys in large companies, including the individual responses and have analysed trends.  I have also read a research paper or two in my time.  The consistent theme is that what staff want, is often not what management think they want.  It is not necessarily what they say they want either.  Often, it is the case of what the “official reason” for them  leaving is not actually the reason at all, but it is an easier message to deliver.  And what is the easiest message to deliver, I hear you ask?  I was head-hunted and they made me an offer I couldn’t refuse.

Ok, let me tell you that this is sometimes the case (I know this because I have done it myself), however, it is not as often as what people say.  Here’s how it goes most of the time… At a certain point, something happens that tips and employee from being committed to the company over to being open to offers elsewhere.  Good people never join the company with the mindset that they will leave, unless it is only a short-term gig,  or if you hired them into a role that they had to take at that point in time due to not having anything better or, you sold them an inaccurate description of the role and company.  So something, or more likely a combination of frustrations has tipped them over the edge.  They begin looking or at least being open to discussions and eventually make the move.  It’s not always for more money, but sometimes they do receive a hefty increase with their new job.

Now back to your conversation with your freshly resigned employee… or, what is normally the case, shortly after the conversation because no doubt, you politely expressed disappointment, went for a drive and swore at your sun visor.  Now that your drive is over and you have calmed down, I have some sobering news for you; it’s too late.  Yes, you could throw the kitchen sink at them and compel them to stay.  I’ve seen that happen both from our side and from the side of a candidate applying with us who chooses to stay with their current employer.
Oh, so you want to join us because you feel your current company is not providing you the right development opportunities, doesn’t recognise your performance, continues to pile more and more work on you, changes direction all the time and you don’t see a future there?  Wait… you mean to tell me all those issues have suddenly been solved because they have offered you an additional $10k to stay?  Great.  Six months later we get the call.  Is that role still open? So to Circle Back to Our Initial Question-

Should I Make an Employer Counter Offer?

What’s the answer?  Should you buy yourself another 6 months?  Well, every circumstance is different.  If your company’s going to fall over then maybe do it.

But my question to you is; if that person was so important in the first place, how did you let it get to that point?

Implementing Successful Staff Retention Strategies

One final word of caution on this. Word gets around. If you make this a habit, people learn that’s how you get a pay rise within your company. You might soon find a bunch of people who feel underpaid submitting resignation letters to get that extra money and that is not a good situation to be in.  Best thing to do is to focus on the fundamentals of what will help people to want to stay. Implementing strategies for staff retention is cheaper, impacts a greater number of people and will help to improve engagement and morale levels of those remaining with the business.

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