One time or another, a prized employee from your staff will approach you and let you know that he or she has received a better offer. Being put in that situation doesn’t necessarily equate to you losing one of your best people. In these cases, employees are coming to you to give notice; but, in one way or another, he or she will certainly be open to an offer from you that can match that new job.
Having employee retention in mind, it means that the next move is entirely up to you; and you may not have a lot of time on your hands. You can negotiate with the employee for a little more time so that you can craft a good-enough counter-offer; but usually, employees already just want to give their notice and jump ship as soon as possible. Given this situation, you might want to know what you need to do when it comes to handling situations like these. Here are a few tips that we can share.
Is coming up with a counter-offer always the best solution? The immediate answer for most of us will be ‘yes.’ The reason behind this is that we are looking at the expense of training a new employee before taking on the role of the previous one. Moreover, you will still need to consider the learning curve of the new employee to acclimatize to the new role and the company. Another consideration is that you will be short-handed during the time while you’re searching for, hiring, and training the new hire.
Unless by some chance that the employee is really someone who has special skills that your business can’t live without, the actual cost of retaining him or her may actually be more expensive in the long run. Always put into consideration that hiring and training a replacement is a one-time expense. A raise, on the other hand, gets more and more costly as time goes by. Likewise, a staff member who has been granted a counter-offer might keep on doing a job-hunt as a way to guarantee salary increases that aren’t part of your company’s regular process.
If you’re put into this dilemma, always weigh the actual costs of acquiring a new hire as compared to maintaining an employee in the long run.
Another important thing to consider are the reasons why the employee went job-hunting. You’ll be surprised that it may not be ‘about the money;’ as there are instances when employees jump-ship to a less-paying company or job. These reasons can include your company’s work environment, incompatibility with colleagues or managers, or even a perception of instability in your company. When you have these reasons in the mind of the employee; almost all of the time, a raise or better benefits won’t be the solution to these issues. Use these underlying issues as a signal that he or she is most probably not the only person feeling these insecurities. You might also want to address these issues head-on to keep the rest of your staff happy.
There’s also another reason why you need to keep your counter-offers to a very minimum. Throwing counter-offers around too much gives the impression that your company is a ‘pushover.’ This in turn, might alert your employees that they just need to give a notice to resign to automatically get a raise. Rarely employing counter-offers as a means to retain employees, will give your staff the perception that you value employees who stand out due to performance.