Counter Offer; Counter Productive - Part 2
Should I make a counter offer? If you are at risk of losing a high performing employee, is a counter offer the only option? Research has shown that the success rate of counter offers can be limited; let me share some reasons why:
- When an employee decides to leave an organisation they are mentally prepared, in some cases for months. They have planned their exit strategy over and over again in their heads but when you present an attractive counter offer and they accept, the reality is they will force themselves to work in the same environment and with the same people that they have already decided to leave!
- After acceptance the employee will always think about the other offer they gave up and understandably will question from time to time if they have made the right decision.
Statistics show when a counter offer is accepted, the candidate will be back exploring the market again within 3 months, all for the same reasons they considered in the first instance!
- Your offer may include a more senior title, bigger remit and more decent salary. However all these changes come with a price tag if other employees find out or suspect how you have managed to retain their team member. It will be natural for them to wonder what kind of package and benefits you offered to keep their colleague on board. In some cases this can create instability and shake up internal equity within teams/departments.
- If your counter offer was a success and you have retained the employee be prepared for others to start negotiating with you on salary and/or promotions, and they may also seek other opportunities in the market to enhance their position in your business.
- Statistics show when a counter offer is accepted, the candidate will be back exploring the market again within 3 months, all for the same reasons they considered in the first instance!
In my experience whether you are an employee or an employer, counter offers in most cases are counterproductive for both parties.
A recent survey conducted by Morgan McKinley revealed “professional job seekers are motivated more by opportunities for career progression than by money – nearly two thirds cited lack of career progression as their main reason for leaving a job”
The recruitment process plays a vital part in setting expectations for candidates around timelines for career progression. If you would like advice on how to best position this within your organisation or team please don’t hesitate to contact Morgan McKinley’s specialist consultants.