4 Reasons Counteroffers Don't Work

Reasons Counteroffers Don't Work

You’re in the midst of a major project when Maureen, one of your best accountants, comes to you with some bad news: She’s resigning to accept another firm’s offer. Caught off guard, you immediately begin asking questions about her new position, and you start calculating possible counteroffers in your head.

It’s a common reaction, and it may seem like a good idea at the time. Traditional management advice would tell you to try to hang on to the employee. You’re worried about finishing the project on time, and she’s integral to its success. Moreover, if she goes, you’ll have to reassign her work and carve time out to recruit, hire and train her replacement.

But counteroffers rarely work. In fact, employees who accept them frequently end up leaving the company in relatively short order. What’s more, counteroffers can be harmful to your staff and your ability to effectively manage them. Here’s why:

1. Counteroffers don’t fix the problem.

The process of looking for a new job is an arduous one, and people don’t go through it without a good reason. In other words, happy employees don’t go to the trouble to even look for a new opportunity, let alone accept one. Sure, a counteroffer can address a portion of an employee’s dissatisfaction with salary and title. But if a worker feels like she doesn’t fit in with the company culture, lacks chemistry with the team or can’t strike the right work-life balance, a counteroffer won’t solve her problems. And she’ll likely start looking for a job again as soon as the thrill of the salary increase or promotion wears off. 

2. They also set a bad example.

Even if you ask the employee not to talk about her resignation and counteroffer, word will probably get around. And if it does, you can bet that your other employees will expect similar treatment. Some might even start looking for a new job just so they can get their own counteroffer.

3. Morale takes a dive.

Once word gets around about the counteroffer, two things will likely happen. First, coworkers — especially those at the same level — will resent the employee you worked so hard to hang on to because she’s now fetching a larger salary for the same amount of work. Tension will grow. Second, your employees will start to believe that it takes a threat, rather than hard work and top results, to get a raise or a promotion, and the quality of their work will drop.

4. Your relationship with the employee is never the same.

If your counteroffer persuades the employee to stick around, you might initially feel grateful and relieved. But after that glow goes away, you’ll probably start to question her loyalty. You’ll wonder whether she’s still out there looking for another position, and you’ll hesitate before providing her the kind of mentoring and training she needs to grow and excel in her job.

Luckily, counteroffers aren’t the only way to retain your best workers. The best management advice says to check in frequently with employees and make sure they’re challenged and satisfied with their career path. Also, regularly assess your salaries with resources like the 2015 Salary Guide from Robert Half to ensure your compensation is fair. 

Delynn Senna​DeLynn Senna, CPA, is the executive director of Robert Half Finance & Accounting. She joined Robert Half in 1996 as a recruiting manager. She has since played key roles in Robert Half’s permanent placement operations, also serving as a division director and later a senior business consultant. DeLynn was named executive director in January 2005. In her current role, she leads Robert Half Finance & Accounting’s global operations, including defining brand positioning, working with executive and field leadership across five continents to develop growth strategies, operating processes, and to shape and promote the company’s vision internally and externally.


Photo Credit: Kingroyos, Creative Commons License