Niles Associates, Inc
Counter Offers
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You may want to think twice about making a counter offer, but please read to the caveat at the end.

Here's the scenario: A valued employee enters your office with resignation letter in hand. Thoughts are racing through your mind, such as, "I can't afford to lose this person, especially right now. Everyone is over-extended as it is. Maybe I can talk him/her out of it."

Maybe you can, but watch out because you might get what you wish for. The unintended consequences are pretty universal. Making a counter offer to an employee who submits a resignation is generally a losing proposition.

Before you leap, ask yourself these questions and consider the potential effects:

   
Question Effect
   
Why wasn't the employee worth the extra in the first place? Your credibility, and that of your company, is tarnished.
Who else are you holding out on? How does it make everyone else feel? Company morale is undermined
Will other employees try to get in on the same act? More unrest among the troops
Do you know the statistics on the success rate of counter offers? According to the National Employment Association, over 80% of all employees who accept counters voluntarily leave their employer within six months. A majority of the rest end up being terminated (fired, laid-off, etc.) within twelve months. Wasted money and time
Do you really want an employee that can be bought? Will you ever again feel confident of the employee's loyalty?
 
Trust and respect are damaged from both directions

Caveat!

Don't confuse an employee checking out the "opportunity landscape" with a lack of loyalty. It's what we call the "groundhog syndrome." It's common for employees to check out the landscape, and in the process, confirm satisfaction with his/her current situation. Consideration of another position, whether by job board posting or response to a recruiter's contact, can actually yield a more loyal employee.

Niles Associates, Inc
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