Employees should avoid playing their current employer off against a new prospect in the hope that they will improve their package. Despite 57% of respondents who identify themselves as employers saying they would make a counter-offer, an overwhelming 89% say they have never made one.
This should serve as a warning to the 48% of employees who feel they would ‘definitely’ or ‘probably’ be made a counter-offer if they were to resign tomorrow.
The survey of mid-to-senior finance professionals, conducted by recruiter Communicate in the first quarter of 2013, sought to examine the lengths companies are going to retain their best staff. Counter-offers – though made to look as if they have an employees’ best interests at heart – are largely deemed a Machiavellian tactic to ensure someone parts ways with a business on its terms, rather than their own.
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Asked to elaborate, employers were largely unanimous in their reasoning: that a counter-offer just delays the inevitable and that resignation should not be used as a bargaining tool. One respondent answered, ‘Is this a game of ransom?’.
However, of the 16 participants who indicated that they have previously made a counter-offer, the experience was generally a positive one. Half said they would do so again, and six said it was a possibility. Many reasoned that counter-offers are “cheaper than recruiting and training a replacement”, though several respondents did suggest they would make a counter-offer with the employee in mind: “To keep someone who is highly rated and where I could make a genuine improvement to their current situation within the company”.
Of those respondents who answered as an employee, only 21% have ever accepted a counter-offer. Moreover, when asked to consider whether they would accept a counter-offer if they were to resign tomorrow, a mere 5% answered yes.
That said, of those who have accepted a counter-offer, 89% indicated that the promises of the offer had been kept – though two aggrieved respondents informed us that this was not the case for them, one saying they were “disappointed after a year”, the other that their “one year contract extension only lasted 6 months even though the job wasn’t finished”.
When asked what a counter-offer would need to include to consider acceptance, the response was similar time and again: promotion, increased salary/benefits, new challenges, a change in scope and responsibilities. Several people said that remuneration would have to be increased by at least 20% to make the offer viable.
However, numerous respondents raised concerns over the general concept of a counter-offer, with several saying they would be ‘suspicious’ of counter-offers and that explanation would be required as to “why that value wasn’t on offer before resignation”.
James Lock, CEO of Communicate, comments, “It is easy to understand why companies consider counter-offering departing employees. Losing staff not only results in a vacancy, which can be pricey and time-consuming to fill, but can also be costly in terms of reputation and future business, particularly if the employee was client facing and developed a strong rapport with contacts who may be more loyal to them than the company.
“However, the results of Communicate’s survey show that employers, on the whole, understand that a counter-offer is in fact a knee-jerk reaction which often benefits neither the company nor the employee. Employees, in turn, prove that they are wary of counter-offers and place career progression and job satisfaction above the security of remaining somewhere they feel comfortable.
“Personnel change is all part of the ebb and flow of a career or business cycle. Employers and employees alike should thus see resignation as opportunity, not loss.”
Paul Gray is an entrepreneur and digital publisher who creates online publications focused on solving problems, delivering news, and providing platforms for informed comment and debate. He is associated with HRZone and has built businesses in the HR and professional publishing sector. His work emphasizes creating industry-specific content platforms.
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