The HR Ninja Blog

With reports being circulated that a huge percentage of workers plan to switch jobs or employers the minute the economy starts to show real signs of improvement, a great many organizations could soon be finding themselves in a position where they are about to lose valuable employees whose skill sets are going to make them extremely hard to replace, especially in view of the perceived talent shortage.  For many companies, the sudden threat that they are faced with is likely to serve as a wake-up call and their knee-jerk reaction may well be to put forward a counter offer in an attempt to retain workers whose value they probably should have recognized sooner.

Counter offers, however, present a number of problems.  First of all, it has to be borne in mind that money is often not the primary motivator which encourages employees to move on.  More often it is issues such as poor management and lack of recognition which are the cause of their discontent.  In cases such as these, even the offer of a considerable salary increase is unlikely to persuade an employee to stay.  Even if it is though, the underlying issues which caused the worker to want to decamp are still going to be there unless the employer addresses these too, and some suggest that a huge proportion of those who do accept massive counter offers still end up handing in their resignations within just a year anyway.  Aside from the fact that the extra money does not compensate them sufficiently for their fundamental unhappiness in their work, in showing the willingness to increase their pay so considerably, the employer himself draws their attention to what they are actually worth.  These employees then have the confidence to go in search of another position which not only pays more money, but in which they expect to experience greater overall job satisfaction.  The employer effectively shoots himself in the foot by showing the individual just how much he or she is worth.

Another problem with counter offers is that they can have a very demotivating effect on other staff, who then begin to feel as though they too have not been paid what they are truly worth.  In some cases, this can lead to others putting forward their letters of resignation in the hope or expectation that they will also receive a generous counter offer, whether they actually deserve one or not.

With the threat of so many employees potentially wanting to find alternative positions as soon as the opportunity presents itself, employers need to be thinking now about who they want to retain and what it would take to keep valuable workers, rather than grasping at the straw of the counter offer at the eleventh hour.