Why you shouldn't Counter Offer?

Asking your resigning employee to stay back is not new. The manner in which we handle counteroffers often has to do with how we value the person who is resigning; his/her personality; the employee’s history with the company; and not forgetting why on earth you are counteroffering. Realistically, there shouldn’t be anything typical about counteroffer scenarios if we, as employers, are clear from the onset that no counteroffer or negotiation would keep any employee from quitting again (and again!) in the future!

I believe we are just postponing the inevitable.

“Kamal, she is a strong employee whom I can always count for positive deliveries at speed. While I know that’s she’s asking for a 40% hike to be retained, she’s of immense value to us right now. Reluctantly, I relented while at the same time predicting a 2nd resignation from the very same reportee. This inevitably happened 3 months later for a similar reason (more money!) much to the disappointment and embarrassment of my manager. But I knew she was trying her best to retain her trusted colleague.

It’s been 11 years since that incident and I have witnessed an avalanche of counteroffers in the workplace with similar disastrous ending: 90% plus of those who have been counter-offered predictably leave the company within a few months. I’m at a dilemma to which I hate more – having to see employees whom my managers have negotiated a higher salary leave the company soon after with no sense of responsibility nor remorse for having exploited their managers; or watching my managers celebrate short-lived victories resulting from poor counteroffer judgments only to lose their own trust in people!

My take is that counter-offering to retain an employee is both dangerous and futile. Dangerous because the word gets around (oh yes, it almost always does) and many others will follow the trend; and futile as I strongly credit resignation to the point when employees are already having an emotional disengagement from their job and the company. The so called “disengagement” seeps into the mind; gets parked there; and now awaits for a trigger or two to be reactivated. Money is just a default motivator simply because it is measurable and tangible!

I can’t help but think that perhaps the reason for the failed counteroffers is that we fail to address the underlying issues that led to individuals resigning in the first place: The reasons for resignations are plenty but these are my favorites:

1. Role
2. Title
3. Manager
4. Money

I believe that if you have not addressed any of these 4 while an employee is working for you, it would be unprofessional to offer these only upon resignations. Can you blame an employee for choosing to walk over you and your counteroffer a few months down the road when your actual reason to counteroffer was to selfishly tide over the situation rather  than rewarding your employee on basis of merit and capability? 

Allowing for such downbeat negotiations too is a poor reflection of a company’s HR policies which should be tracking talent needs with a proactive approach through rewards and recognition. You see, this is where great HR triumphs over the usual because by now we should know that at some point in the career of a good talent, all of the 4 (role, title, manager, and money) are always offered by the next employer in a seemingly more attractive way!

I know counter –offering to change the manager is a tricky one, but I keep the option to write about it for another day. :)

I prefer to accept resignations as soon as people offer to quit! Sounds arrogant/cocky? I feel if I could not demonstrate your significance to me when we are together then I’m not being honest meeting your demands after you've chosen to “point-a-gun” called resignation to my head!

First published on https://kamalkaranth.com/the-counter/