5 Reasons You Should Think Twice About Making a Counteroffer

By Robert Half January 18, 2017 at 2:00pm

In today’s job market, skilled finance and accounting professionals are hard to come by. So it’s highly likely you’ll find some of your employees being wooed by the competition. If it’s a particularly valued staff member, you might consider making a counteroffer. Sensible reaction, yes?

Actually, no. Countering rarely ends favorably for managers. Here are five reasons making a counteroffer is counterproductive:

1. It’s not a permanent fix

Making a counteroffer is like taking aspirin for an impacted wisdom tooth: It might make the pain go away for a bit, but it’s not a long-term solution. In a Robert Half survey, 38 percent of CFOs polled noted that employees who accepted counteroffers still ended up leaving within one year.

2. It sets a precedent that may haunt you

If the word around the water cooler is that you made Jen a counteroffer, Simon may start to wonder why his salary isn’t increasing. Then, if Simon really wants to drive a hard bargain, he may start his own job search so he can use job offers as leverage for salary negotiation. See why that’s not a good precedent to set?

3. It can cause a dip in morale

When the news of Jen’s salary increase gets around — and it will get around — your team may start to point the finger of favoritism. By tendering a counteroffer, you also send the message that threats of leaving are a means of climbing the ladder, rather than outstanding performance and dedication. And what about Jen? She might find her coworkers giving her the cold shoulder, which probably won’t make her want to stick around in the long run. It's not good for morale.

4. It causes a rift in trust

Say you do make Jen a counteroffer. At first you might be happy and relieved that she’s still a member of the team. After all, she makes quarterly reporting seem so easy. But once your relief starts to wane, you may start to feel less positive. Now not only do Jen’s peers not trust her, you don’t either. Questioning an employee’s loyalty is hard to bounce back from, and though you may still emanate professionalism, Jen probably feels the bad vibes.

5. It doesn’t improve employee performance

You may think that Jen owes you one, considering you just bumped her salary or gave her a few extra vacation days. On the flip side, she may feel like you can’t live without her, and the notion of being indispensable doesn’t give her much motivation to boost her performance. In either case, the counteroffer is making waves beyond your original intention.

While you should avoid making counteroffers, you don’t want to lose your best talent to the competition, either. Sit down regularly with employees to make certain they’re happy with their career paths and the professional development opportunities your organization provides. Additionally, do research to ensure you’re offering a competitive salary. Doing so can help you with employee retention without having to entertain the idea of a counteroffer.

Visit our Salary Center, get a copy of the Salary Guide, and consider getting help from a staffing agency for your next hire.

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