Work continues to pile up, staffing shortages continue to be a problem and now, your best employee turns in resignation! Your first gut reaction might be to find a way to fight to keep them through extending a counteroffer. Retaining staff has been a critical focus to employers as the demand for skilled accounting and finance talent continues to remain high. Counteroffers have now become a retention strategy as companies struggle to keep people.
Research conducted by AMBRION has shown that over 70% of leaders in accounting and finance are willing to extended counteroffers to keep employees from leaving for another job.
Although extending a counteroffer seems like a solution to avoiding the tedious and prolonged process it takes to replace good employees in today’s market, statistics show that counteroffers rarely end in the long term tenure of staff. In fact, 80% of employees that take a counteroffer are back on the market in 6 months.
Before extending a counteroffer, here are a few things to consider that might have you second guessing if a counteroffer makes sense.
Underlying issues often are not resolved with a counteroffer
Money is just a band-aid and often doesn’t solve the deep rooted issues that your employee is feeling. AMBRION has specialized in recruiting accounting and finance talent for over 22 years and it is a rare occasion that the only reason someone would consider leaving their current position is due to money. In fact, AMBRION counsels potential candidates to ask for a raise if money is the reason they are unhappy.
Underlying issues must be understood and addressed if your relationship with your staff is going to sustain. By focusing on the relationship between you and your staff and dissecting what their career goals are will help you to avoid just throwing out money band-aiding the problem vs fixing the root cause of why the employee was looking in the first place.
Negative impact on morale
While other employees may not know you offered someone more money, peers talk and rumors spread and others find out that there are large discrepancies in pay. This can lead to other disgruntled employees.
Additionally, if a promotion is given at an unlikely time, other employees who might have been vying for that position might feel slighted especially if they didn’t think the promotion was warranted.
Employees are not set up for success
Money often equates to expectations of level of their performance. The more someone is paid, the more they should be offering in the role that they are in. Sometimes a counteroffer is just a realignment financially, but sometimes it leads to unreasonable expectations.
If the counteroffer you make includes a promotion, you’ll need to ask yourself, was this person ready for management? Did you move them onto an adjacent team to try to keep them? In both scenarios, it’s critical that the employee is offered the training and development needed in their new role or there is potential they are not set up for success.
Diminished trust and integrity
There is always some level of trust that is broken when you have been put in the scenario where you need to extend a counteroffer to get your employee to stay. After all, your employee wasn’t likely forthright in asking you for what they needed before they came to you to turn in notice. Maybe you’re one of those leaders that just believes this is a natural part of business and you move on, however most people tend to not be able to forget that a part of the loyalty that was broken and this could negatively impact your relationship going forward.
Before extending a counteroffer to your employee that just handed you their resignation, the points above should be carefully considered. The pain of trying to find new talent might be immediately solved, but underlying issues and doubt might still remain. There is good talent in the marketplace that will come to you with a fresh sense of enthusiasm for the role and therefore may ultimately lead to a stronger performing employee with a positive outlook on the new success and skills they are gaining.