Banner Default Image

Useful resources

The Truth Behind Why Counter Offers Don’t Work

09 November 2021

By Ursula Colman

The Truth Behind Why Counter Offers Don’t Work

Leaving a job is a bit like getting divorced. The fallout for a business is not only costly, but can have far reaching, long lasting and damaging implications.

When a good sales employee resigns, it can set off a ripple effect throughout the business. Other team members may reconsider their own motivations for staying with the company. This is especially true if the leaver was well liked, respected and made a positive impact.

People leave jobs for a variety of reasons and there’s usually been an accumulation of reasons by the time they do decide to resign. These reasons can include a dislike of their boss, broken promises, an erosion of trust, a lack of career progression or being overlooked for promotion. It’s less likely that the reason for leaving will only be about their salary, although this is often cited.

It’s worth thinking about the thought process the person leaving has been through to reach their decision. The decision to leave will have been in their minds for some time and it’s rarely a knee jerk reaction. They may have raised issues with management, which they felt were not followed through or highlighted concerns, which were simply ignored. Whatever the reasons, there will have been a process of disengagement.

When a sales person resigns, a frequent reaction by companies is to counter offer and match or better their new salary package. It’s at this stage, an array of fresh promises may be given in the hope the leaver reconsiders and that the problem simply goes away.

Replacing a good employee can not only take months, but usually comes at a higher salary cost. They’ll also be a detrimental loss of valuable customer relationships to consider, a shift in team dynamics along with the loss of expertise and history to the business.

In some instances, an employee’s resignation may be the first time an employer is aware that there was an issue. Whilst this ought not to be the case, it often happens. A person resigning should never come as a complete surprise. Ensuring employees feel they are valued, engaged and paid appropriately whilst in post, will help to avoid such surprises.

The problem in these scenarios is that mentally the person has already switched off from the business. Between first thinking about leaving and then resigning, much time has been spent reinforcing their belief that they no longer have a future ahead of them in the business. This passage of time only cements in their minds that leaving is the right course of action and consequently a ‘divorce’ is inevitable.

The truth is, getting counter offered, a last-minute promotion or pay rise at the point of resignation, just doesn’t sit right with an employee for long. After all, they’ll question why these were not actioned long before they resigned and are likely to be left feeling they have been taken advantage of.

There’s also the hidden risk for employers that other team members may threaten resignation in the knowledge that it’s a proven way to secure a pay rise. This potential domino effect can be damaging to a business and is best avoided.

If by offering a few extra thousand pounds on their salary convinces them to stay, beware, as this is only likely to be a temporary fix. Any positive impact of a counter offer seldom lasts beyond six months or so, as their original feelings and reasons for leaving, was never just about the money.

 
Share this article