Don't Be a Fool, Don't Offer a Counteroffer

As a business manager, you will have a point in your career when an employee delivers you their resignation letter. Watching an employee leave your company is hard, especially if they’re a good one. 

Resignations are inevitable and there are a lot of ways to handle the situation: argue with them, express your relief, give a counteroffer, or accept their resignation respectfully.

Obviously, expressing resentment or relief at the candidate’s departure is not your best choice, but maybe you’re considering suggesting a counteroffer. Last week, we advised candidates that accepting a counteroffer was not in their best interest, and this week, we want to tell you why even suggesting a counteroffer in the first place is a bad idea. 

Here are a few things you should consider before offering a counteroffer:

Sets a precedent. If you start proposing counteroffers, you have to think about where the buck stops. How many counteroffers are you willing to offer in a year? What employees are worth keeping? By offering one employee a counteroffer, you risk damaging your employer brand with other employees. When you give an employee a raise, a promotion or another perk as a retention measure, other employees who have worked hard will start questioning the value of their work. They may even think about resigning themselves in an attempt to get the same offer.

It’s a temporary fix. A lot of counteroffers include higher compensation, but it’s likely not enough to satisfy the resignee. There’s a pretty good chance the employee isn’t just leaving because they want higher compensation. Most employees leave because of negative work cultures, issues with management, or the workload, not just because they want more money. If a candidate accepts your counteroffer for extra benefits, there is an 80 percent chance they’ll be gone in less than six months because the issues haven’t been addressed. Since it can cost 33 percent of an employees salary to replace them, now you’ve paid them more to keep them on board, it will cost even more to replace them. Save yourself the effort and money and let them leave. 

Everybody can be replaced. Even the best employees can be replaced. When an employee leaves, you have a plethora of options for replacing them. You can promote another current employee with similar skills, a knowledge of your company and a desire to grow in their career, or you can hire someone new. No matter what you decide, you’ll have a position available and you’ll need help getting it filled as soon as possible. By partnering with The James Allen Companies, you can get that position filled quickly with the best candidate possible. No one is irreplaceable, and we can find the candidates that have the right skills, talent and personality to work well at your organization. 

Dealing with an employee resignation leaves you with a lot of options, and proposing a counteroffer is not a good one. Accept the resignation with respect, wish the employee the best and use it as an opportunity to better your employer brand. Resignations are inevitable and if you’re needing to recruit professionals to help propel your business, give The James Allen Companies a call today to see how we can help you.