Counteroffers Don’t Cut It, Even in a Tight Hiring Market
The signs of an economic recovery are all around us: COVID vaccinations are up and cases are down; restrictions are being relaxed; and competition in the job market is fierce. In many cases, the only thing preventing businesses from ramping up to full speed is the challenge of finding good employees to fill open positions.
That harsh reality has put job seekers in an enviable position, and left employers facing some dilemmas. One in particular is whether to make counteroffers once employees give notice. The good news is that most organizations are steering clear of that practice – and that’s exactly what they should be doing.
Counteroffers are counterproductive
Let’s say an employee hands you his or her resignation. What they’re telling you is that they no longer want to be part of your organization. They may feel the work is uninteresting, their compensation or benefits are inadequate, or their colleagues or work environment are the wrong fit. Whatever the case, they’re not happy, not engaged, and not committed to your company. Do you really want to keep that person around?
Too often, organizations panic at the thought of losing an employee and make a counteroffer. Unfortunately, throwing money at the situation rarely solves the problem. In fact, the employee can take your counteroffer and go back to the new employer to get more money. In either case, you lose. Your best option is to skip the counteroffer, wish the employee well, and rev up your hiring process to find a replacement that is excited about joining your company.
What to do instead of making a counteroffer
Once an employee gives notice, your first step should be conducting an exit interview. Find out exactly why that person has decided to seek greener pastures elsewhere. You may find it’s something personal that you have no control over: a desire to move closer to family, to pursue a new career, or a chance to rejoin a former colleague. However, if the feedback you receive indicates the decision relates to shortcomings within your company, you may need to take a hard look in the mirror and determine if changes should be made.
The best approach is to assess your entire workforce. Rather than drawing conclusions based on one employee, survey the full team to get a sense of what employee engagement and job satisfaction look like across the company. If those insights uncover more widespread problems, it’s time to put a plan in place to turn things around, before you have a mass exodus on your hands.
The experts at Alaant are committed to working with employers to put the best team on the field every day – not only through hiring new employees, but by retaining the ones that make a positive impact. Need help building engagement and increasing retention? Contact us today and let’s get the conversation started!
Miranda March, Digital Communications Specialist
Miranda has a real knack for connecting the dots between employers and job seekers. She prides herself on keeping a pulse on the national and local hiring markets. In her downtime, she enjoys cooking new foods and spending time with her family. A little-known fact about Miranda is her love of video games, new and old.