I've never been a proponent of counter-offers, in fact, I believe in 99% of the cases, they are a waste of time (and sometimes money). Yet, I consistently find myself debating managers about extending counter-offers to employees that have submitted their resignations. Even after my counsel as to why it's a bad idea, they still insist on making an effort to keep the individual onboard.
Here's why I'm not in a favor of counter-offers:
1. The employee has already mentally checked out
Think about it. This individual has already gone through the process of exploring a new opportunity, been through an interviewing process, has received an offer that they feel is better than what they have now and has made the decision to move on. That's quite a bit of time and commitment by this individual and a huge life decision. Clearly the emotional needs, and perhaps financial needs, are not being met in the current role. Convincing someone their emotional needs can be met all of the sudden, is a daunting task. Don't bother.
2. It sends a bad precedent
Extending a counter-offer opens up the "flood gates" to other current, valued employees in being able to leverage themselves. Perhaps they will be made aware of what the counter-offer was and will now be expecting the same. Also, they may begin seeking employment elsewhere with the hopes of leveraging an offer against a potential counter-offer. If they are "C" players, no problem, let them go. But be very careful about the message this sends to your "A" and "B" players.
3. Sometimes you just have to let them go
Sometimes managers just need to realize the company can't offer the same opportunity as the new employer. Whether it be title, salary, benefits or location...there will always be an organization out there that is willing to offer more for a skill set than you can.
4. Those that accept, will be back
Research will show you that even if you're able to successfully retain an employee via the counter-offer, they'll be back in six months asking for more, or will end up just leaving. The big questions is: Did you get a ROI on the salary increase you gave this employee for the past six months? In most cases, the answer will be no.
5. Why now?
In conducing exit interviews with individuals that have received counter-offers, the most common theme I hear is "Why weren't you willing to do this before I resigned?" Therein lies the root of the problem. Clearly the ball was dropped by the manager and/or HR in determining the value of the individual to the organization. If mangers or HR are not routinely keeping a pulse on the market, then there is no reason for surprise when attrition rates begin to increase.
There are always going to be exceptions to the rule. I get that. However, in most of the cases that I've been involved, we haven't been able to come close to what was offered. Managers need to understand that attrition is going to happen, whether they like it or not, and letting go is not always a bad thing.
The "grass in not always greener", right? Sometimes, it is.
