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Why A CounterOffer Isn’t In Your Company’s Best Interest

A valued employee has just told you that they have a job offer at another company and they’re going to take it. What do you do? Is your first instinct to extend a counteroffer? Unfortunately, counteroffers aren’t in your company’s best interest. Here are 7 reasons why it’s better to just let that employee go on to their new job rather than trying to lure them back in with a counteroffer.

1. Things Don’t Go Back to Normal:

Counteroffers, at their root, are an attempt to maintain the status quo. Besides offering a little more money and possibly a promotion, you’re trying to get your team to stay the same. But, the problem is, things don’t go back to normal after a counteroffer is accepted. No counteroffer is powerful enough to erase the memory—neither yours nor your team’s—of this employee trying to leave and its ripple effects will be felt throughout your company for a long time.

2. Rewarding People Who Threaten to Jump Ship:

Loyalty to a company isn’t as common as it used to be but that doesn’t mean it shouldn’t be valued or encouraged. The problem with counter offers is that you’re rewarding people for threatening to jump ship. Why should a lack of loyalty help an employee earn more money or get a promotion at your organization? When you reward people for being disloyal, your other employees will take notice and the wrong message will spread like wildfire in your organization.

3. Paranoia of Any PTO Usage:

Let’s be honest, once you’ve reeled an employee back in with a juicy counteroffer, you’re a little afraid they’re still going to leave. And, for good reason, they often do! But this creates an unhealthy paranoia of their paid time off usage. Any time they call in sick, have a dentist’s appointment to go to or extend a long weekend you’ll be wondering if they’re lying and going to an interview or if they’re telling the truth. For the sake of your own sanity, this should be enough reason to discourage you from extending counteroffers in the future.

4. If You Want a Raise, Threaten to Quit:

Your employees hear this message loud and clear when you offer someone a counteroffer: if you want a raise or a promotion, just threaten to quit! The chaos and negativity this creates in your company will damage the positive company culture you’ve worked so hard to establish. Instead of waiting for reviews or going through the established channels of raises and promotions at your organizations, your employees will just go out and get a job offer instead. Suddenly, you’re extending more counteroffers than you ever have before. And what if they’re not swayed by your offer? You’ll be hemorrhaging talented people and your company’s turnover rate will skyrocket, all because of that first counter offer. That’s a domino effect you’ll want to avoid at all costs!

5. Even Happy Employees Will Think of Leaving:

Once your employees get wind of a counteroffer pulling their coworker back in, they’ll start to question everything. Why weren’t they happy here? How much money did they get to come back? Am I really happy here? Could I be earning more elsewhere? Should I start looking for a job too? Doubt and insecurity will fill even your happiest employees’ heads with thoughts of leaving. Hopefully, they won’t act on them, but they very well might.

6. Resentment Spilling Over:

If someone accepts a counteroffer and slowly realizes they still don’t want to work for your company, but they now no longer have a way out, they may stay with your organization and let their resentment fester and spill over into their work. Suddenly, the employee you extended a counteroffer to because they were so valuable and talented will start missing deadlines, forgetting to do one thing or another, calling in sick more frequently, bringing a negative attitude into the office every day, and turning into an employee you really don’t want to have around.

7. Delaying the Inevitable:

Most employees who accept a counteroffer will still be gone within the year. Whether that’s because they finally leave for another offer they’ve found or because you’ve been searching for their replacement, they won’t be around for much longer. So why delay the inevitable? Don’t push off your search for a new employee who would be better suited to that position and who would rather work for your company, just skip the counteroffer and start that search today!

Counteroffers seem like a harmless way to avoid the stress of finding a new employee, but their ripple effects throughout your company can be really damaging. No matter how much money or what new title you offer, the majority of employees who accept a counteroffer are gone within a year. Don’t delay the inevitable!

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