Our Thoughts on Counteroffers
During our history, The Waters Organization has seen many counteroffers and there have been very few instances where a counteroffer has proven to be a sensible career move. In fact, our belief is that most counteroffers are simply stall tactics. The only time when a counteroffer is legitimate is when it addresses the precise issue(s) that led an employee to investigate a new opportunity in the first place.
Companies extend counter offers for a number of reasons. Among these are:
- Morale suffers when people quit
- Companies like to brag about retention rates and lack of turnover
- Departments slow down due to a vacant position
- Resignations look bad on a manager’s record
- The cost of recruiting a new employee is expensive
- The vacation schedule can be devastated
We have seen many reactions to a resignation. Here are some of the comments that are designed to keep an employee in place:
- “We were about to give you a promotion. Let’s discuss it before you make a final decision.”
- “Before you make this public, the V.P. would like to take you to dinner.”
- “Who are you going to work for?” – to be followed by negative comments on the company.
- “We’ll meet the increase in salary, plus $10K.”
Human nature comes into play here making the separation very hard. First, change is difficult. The employee who has put in their notice is facing the unknown and faces the tendency to stay with what is safe. Second, managers react out of the fear of loss and the fear of looking poorly for allowing an employee to leave vs. letting someone go. Therefore, to avoid the natural inclination of accepting a counteroffer consider the following:
- The best reason to look for a new job is never money. If you stay with your current position because of money, the root of the problem will not have been addressed.
- Once you try to resign, your loyalty will be forever questioned.
- Over the long haul, your counteroffer will be taken out of your earnings.
- If the company falls upon hard times, you will be the first one out the door.
- Often times, upon accepting a counteroffer, the company will have already started looking for your replacement.
- An oft-quoted statistic states that 80% of all employees who accept a company’s counteroffer end up leaving (voluntarily or involuntarily) within 6 to 9 months.
So, how do you avoid the pitfall of the counteroffer? Here are the steps that we recommend at The Waters Organization.
- Start with a resignation letter.
- Do not delay – Waiting to turn in a notice is very stressful for you and your family. It is best to give your resignation letter on the day of your decision. Once you have it behind you you’ll be able to get on with your life.
- Remain professional – Keep your eyes on what motivated you to make the decision to move on. Don’t let personal relationships hold you in a position that you have “grown” out of. And remember, there is no compelling reason to tell your existing employer where you are going to work.
- Request confidentiality – Start by turning in your resignation to the appropriate manager, and then tell only those who will be effected by your absence. This makes your departure much less hectic.
- Demand professionalism – Decent and well-managed companies don’t make counteroffers. Their policies are fair and equitable. Most see counteroffers as coercion. Help the managers to remember this fact. But also remember, that sometimes in stressful situations, people can tend to make poor decisions.