Your Star Employee Is Leaving….Should You Counteroffer?
- June 9, 2023
Whether the news of your soon-to-be ex-employee leaving represents a big blow for your company or a possible weight off your management team’s shoulders, the reality of employee turnover is and has always been an unavoidable part of business, come rain or come shine. But like all inevitabilities, how it is prepared for and dealt with determines what it brings for a company, and this rings true for any business looking to thrive in a market filled with unpredictability.
So, if you’ve just had your talented and likeable senior team leader come and tell you they are leaving to go and work for a competitor, how do you react? Do you panic and wrack your brain for a way to make them reconsider their decision? Or do you perhaps treat the issue as something to avoid losing time and resources over, and wish them the best of luck as they depart for pastures new?
Do you make keeping them a priority, and should you even try?
If that individual is a big asset to the company – reliable, motivated, hard to replace (or expensive), and now planning a move to one of your biggest competitors (and perhaps with a time-sensitive caseload on their plate) you will be tempted to offer them the moon to stay. Additionally, the true cost of losing an employee can be prohibitive – hiring fees, recruiting time, onboarding and training – not to mention the nose-dive in morale for other employees who see a valued and talented colleague walking out the door.
But a word of warning. A counteroffer may not be the solution it initially appears, as all angles of the situation need to be looked at before going down that route.
Why Employees Leave
What you should be wary of when looking to convince the employee to reconsider their decision, is going into the conversation with a financial incentive in mind as your bargaining chip. Research states that 50% – 80% of employees that accept counteroffers end up leaving their employer within 6 months due to the same issues that led to their initial decision. The fact is that it’s rarely a salary issue that sees employees leave to take up another job offer, so the chances that an offer of increased salary will keep them at your company are slimmer than you might think.
Rather than an issue of compensation, the following are the biggest reasons employees typically begin embarking on a search for pastures new:
Lack Of Career Progression
If an employee feels they have climbed as far up the career ladder as they can with your business, they are going to start casting their net elsewhere to discover better opportunities. A survey last year conducted by Go1 discovered that 60% of employees that were found to consider leaving their job in 6-12 months’ time, cited a lack of career prospects as their main driver. When a promotion has long been deserved but is not forthcoming, employees will begin to look for it elsewhere.
The same can be said for job satisfaction from a more micro perspective. When an employee’s work doesn’t provide the necessary stimulation for growth or progress that it should, it leads to the dangerous drops in work ethic that the resulting boredom brings. Perhaps your Sales Manager has been dealing with the same clients doing similar work for several years and yearns for a new challenge. Or your Administrator has been hoping for promotion to Team Leader for some time but hasn’t been successful. If an employee doesn’t feel stretched or challenged in their job, they become disinterested and disengaged. Then disinterest quickly transforms into boredom, and this eventually manifests in a search for something else to extend their capabilities.
People don’t quit their jobs; they quit their bosses, and this remains the case today for businesses across all sectors. Poor management practice can do a lot of damage, – killing employee morale and impacting engagement levels – and consequently make the work environment a barrier to, rather than a catalyst for employee success. A workplace that doesn’t encourage ‘out of the box’ thinking or is inflexible with its staff is not going to facilitate success on an individual or collective level, and this is especially the case with working professionals today, with whom working with an employer that shares and lives out similar values to theirs is now much more of an expectation than a luxury.
Employees need to feel valued and respected. They need to look forward to coming to work and enjoying their job. Having these aspects of the work culture in place enables them their drive not only their own career progress but that of the business too.
Better Work Life Balance
Some things money just can’t buy, and this is one of them. Even in a period where flexibility and healthy work-life balance is high on the priority list of many employees. The nature of the work life involved in the many sectors and professional services – as well as the prevalent workaholic culture that pressures many into sacrificing their own well-being for their company’s success – inevitably drives many employees to look towards leaving a position to try to claw back some time for themselves and their family.
Asking The Right Questions
The best way to approach the conversation is by asking a few questions to get a good indication of why your employee is considering leaving. Keeping them general to begin with is best, as not everyone will be willing to discuss their reasons for leaving a job.
A simple “What’s go you thinking of leaving’’ followed by a question asking whether they’d like to discuss it is a good way to get the conversation started. Asking questions can help you understand the underlying issues that have gotten your employee to the point of seriously considering leaving. Ideally, discussing these concerns can help you identify problems that you have the ability to address and retaining your employee.
And, even if they remain unconvinced, you will at the very least have learned from their experience and can make improvements for future employees. Regardless, by addressing the issue and doing your best to find a resolution, you have ensured that you’ve done everything you can to take appropriate action.
Making Your Counteroffer
If you intend to make a counteroffer, start by asking your employee the following questions:
- Do they enjoy working at your company
- Can they envision a future there?
If the answer to both questions is yes it is worth considering a counteroffer. Begin by offering non-financial incentives to encourage them to stay, as we’ve already that these are unlikely to solve the issues at hand. Instead, consider the following alternatives:
- Foster a workplace culture that embraces diversity and inclusion.
- Explore flexible working hours, including options such as flexitime for employees experiencing stress or other options, such as working from home. Employers who are more open to alternative working arrangements tend to be more respected by their teams and see better levels of staff retention.
- Assign them a role that plays to their strengths. Is there an opportunity to move the employee into a position that better suits their skillset and ability? Is there a project/case they could lead on which would challenge them?
- Provide mentoring opportunities – a great mentor can provide invaluable insight, support and guidance to an employee who is struggling with their career.
- Address management issues promptly, as there’s no excuse for poor behaviour in the workplace at any level. Bullying, harassment or just downright rude bosses or staff need to be dealt with ruthlessly.
- Consider hiring additional staff to alleviate workload pressures. If workload overwhelm is the issue, then a temporary or permanent staff addition can reduce pressure on current employees, and lead to an increase in productivity, as well as fewer absences due to stress.
- Establish a clear progression pathway. Everyone wants to feel they can achieve their career ambitions through their work and see tangible progress.
- Develop an employee development plan that shows a clear training, development and progression route for each employee. This will give individuals something to aim for and ensure they are more likely to stay and grow with your company. Remember that taking tangible actions is crucial for the success of your counteroffer.
Potential Pitfalls To Be Mindful Of
Even more important to consider than the pros of a counteroffer are the potential drawbacks involved. The following should be considered before proceeding:
- Could offering a salary increase create imbalance across the team?
- Will other team members pressure for a salary rise when word gets out – and if so, can you manage expectations?
- Will you get a reputation in the market for overpaying that could lead to unsuitable candidates clamouring to join your business for the wrong reasons?
- Can you even afford an increased financial offer in the first place?
- Is there a real chance of the employee taking your offer for granted? Could they continue performing at previous levels or become complacent, even arrogant, because they got their way?
Whatever the outcome, you may want to consider ways to improve staff retention going forward; improving company culture, opening lines of communication to provide transparency and most importantly, valuing your employees. Using conversations around why an employee wants to leave can be a strategic opportunity to reflect and make improvements internally.
As a Manager of Leader in the business, you should always be on alert for the signs that key individuals may be a ‘flight-risk’. In today’s changing labour market, issues like disengagement, burnout, and even “quiet quitting” are becoming increasingly common. But if you can recognise these signs ahead of time, there are still things you can do to re-ignite your staff’s passion for your company and prevent them from seeking other employment options…hopefully long before the conversation around resignation and counteroffers is even on the table.
If despite reasonable negotiation, the employee still intends to leave, it is best to agree to part ways amicably and wish them well. Remember, life is about change. If it’s time for them to move on, let them resign gracefully. Don’t be tempted to behave childishly – that will only get the rest of your team thinking about starting their own covert job hunt.
Instead, consider celebrating their contribution with a kind Thank You gesture. That’s the best way to build trust and successfully manage your remaining team.
About Clayton Recruitment
Clayton Recruitment has been partnering with organisations across the country since 1989 and during that time has built up an excellent reputation for trust and reliability.
With specialist divisions covering Commercial, Financial, and Engineering appointments, on a permanent basis.
If you are building your existing team or looking for your next career move, we can help. And, if you are currently employed, you can be assured of complete confidentiality, professionalism, and honesty throughout the process – as standard.
Click here to speak to one of our experienced specialists or call 01772 259121 for more information on how our exceptional recruitment experience can help your career aspirations.