The Perils of Counter Offers | An employers guide to counter offers
While counter offers can be a way to retain valued employees, they can also be a headache if you are in the process of recruiting. They are often a short term fix when you are trying to retain an employee. Our expert recruitment team at Howett Thorpe share our experience and views of counter offers, how to avoid them and how to manage them as employers.
Proactive Measures to Avoid counter offers in the recruitment process.
If you have been through the recruitment process, invested time, worked on the offer etc, it can be really inconvenient & time consuming if a counter offer comes on the table when they hand in their notice to their current employer.
Our first bit of advice is to initially minimise the risk of counteroffers and here are some ways to do that:
- Open Communication: Maintain open and honest communication with the candidates addressing their concerns and providing opportunities for feedback.
- Use a recruiter: A good recruiter will prepare your candidate for the possibility of being ‘bought back’ buy their current employer. They will also properly qualify a candidate’s job search motivations before introducing them to potential new employers.
- Competitive Compensation and Benefits: Ensure that your compensation and benefits packages are competitive within your industry and aligned to the ways your employees might like to work. For example offering flexible working where possible.
- Career Development: Invest in employee development and provide opportunities for growth and advancement. Make sure this is made clear to the candidate from the beginning so they know it is not just a job but an investment in their future.
By proactively addressing candidates needs and ensuring the candidate sees a long term strategy to their move then you can be in a much stronger position if a counter offer does come to the table and it is more likely to be declined.
On the other side, if a valued employee hands in their notice is a counter offer the way to go?
Should you give a counter offer if a valued employee hands in their notice
Counteroffers, while seemingly appealing as a way to retain valued employees, often prove to be a risky strategy. Here’s why:
- Temporary Fixes: Counteroffers may provide short-term relief, but they rarely address the underlying issues that led to the employee’s decision to leave. It can often be a ‘sticky plaster’ approach.
- Increased Staff Turnover: Studies show that employees who accept counteroffers are more likely to leave their jobs within a short period.
- Lost Momentum: Counter offers, can mean that an employee mentally checked out of a role, so even if they stay their productivity can often be less.
Instead of counter offering, focus on these strategies:
- Open Communication: Maintain open and honest communication with employees throughout their tenure, addressing their concerns and providing opportunities for feedback.
- Competitive Compensation and Benefits: Ensure that your compensation and benefits packages are competitive within your industry as this will help to reduce staff turnover
- Career Development: Invest in employee development and provide opportunities for growth and advancement.
- Recognise and Reward Performance: Acknowledge and reward employees’ contributions to the company’s success.
- Exit Interviews: Conduct exit interviews with departing employees to gain valuable insights into their reasons for leaving. This information can help you identify areas for improvement and reduce future turnover.
By prioritising employee satisfaction and creating a positive work environment, you can significantly reduce the likelihood of counteroffers and overall employee retention.
Our view is that counteroffers are often a temporary fix that can have longer term negative consequences.