When considering whether to accept a counteroffer, it’s important not to focus solely on the money – even though it can be very tempting to make a decision based on the figures.
A counter-offer can seem positive if all you’re hoping for is an increase in salary. 57% of people presented with counter-offers will accept based purely on financial gain, and avoiding the hassle involved with starting a new job with a new company.
But, it often leaves behind a sour taste – many employees end up questioning why they had to push their employers so hard just to receive a well-deserved pay rise or promotion. Questions such as, “why did it take me threatening them with my notice to get them to see my value?” will begin to niggle and eventually, they will end up moving on.
Statistics show that 90% of employees who accept a counter-offer have left their positions within 12 months.
Was it just about the money?
Consider all of the reasons why you ended up looking for a role with another company. Was it just about the money, or was there something else that was motivating you?
If you feel undervalued by your employer, or the role isn’t challenging enough, or perhaps you can’t see the career progression ahead of you that you’d hope for – an increase in your salary, and even a more senior job title, probably won’t change your feelings in the long run. Ignoring these feelings will ultimately lead you to regret your decision to stay, if you based it on salary and salary alone.
It’s not always about whether or not you’re happy, either. Your initial resignation, even if it was driven by your desire to be given a counter-offer, may lead to your employer questioning your loyalty to the company or your commitment to your role. This can lead to your chances for promotion decreasing, which can leave your future with the company in tricky waters once again.
Can you turn down a counter-offer?
We get asked this question a lot. And the answer is - yes, absolutely! First of all, you can ask for a day or two to consider their offer if you need a bit of time to think. After a few days, it's polite to put your answer officially in writing to your employer. Start by thanking them for presenting you with a counter-offer in the first place. Then, stress again the reasons that you are leaving that cannot be solved with a financial counter-offer. These could be: a lack of career progression, the inability to work as flexibly as you'd like, or that the company's values no longer align with your own. Thank your employer for the experience of working with them, and the business, and finally state your official last working day as per your contract.
We would always recommend writing a polite resignation letter that thanks your employer for the experience, even if it wasn't as good as you'd have liked, because it's never a good idea to burn bridges in your professional life. You never know where and when these people might pop up again!
Are you considering giving an employee a counter-offer?
Everything above is relevant to you, too. Try and understand the motives of your employee and consider the long term effects of a counter-offer on both them, and you as a business.
The truth is, counter-offers may seem like good strategies, but by that point it is probably too late to maintain a healthy long term relationships. Plus – if you’re willing to counter-offer, that means you value those employees and want them to stay.
Are you doing enough to show your top employees how much you value them, in order to reduce the chances of them looking elsewhere?
Did you know: it can cost over 200% more to replace a senior executive than the original salary. Plus, you’ve got to spend time on the recruitment process, as well as all of the onboarding following a hire.
Best practice for businesses wanting to make their staff feel valued, and avoid these situations include regularly benchmarking against the competition, and adjusting low salaries accordingly. Be open with your employees and encourage regular discussion around what can be done to improve their happiness and work satisfaction. You’ll often find these aren’t unreasonable requests either – some employees would be over the moon to shift their working day just half an hour earlier, or work from home a few days a week. It’s not always about offering them huge salaries – happiness at work, career progression, and work/life balance are all really important benefits you can offer.
If you want to speak to a member of our expert team about your recruitment strategy - get in touch today.