If you are willing to get promoted, it is better to go for another offer in the market. It is generally the fastest way to get paid more or promoted. The great resignation drive is somewhere also linked to the same thought process. People are looking for better offers in the market and are quitting their existing jobs in search of new ones. Many others are interested in flexible work routines to maintain enhanced work-life balance.
In this scenario, most companies find it difficult to retain talent. The talent pool is shrinking fast, and leaders are trying to do anything to stop employees from getting out of the door. Presenting a counteroffer is one of the best retention tools leaders use in big brands. To avoid losing their employees, leaders try to capture their attention with a one-time bonus, promotion, merit increase, equity grant, or the opportunity to switch to another team. In addition, the counteroffer idea may make leaders temporarily feel that they have won the battle and the situation is now under control. Still, they often fail to realize the other side of a counteroffer.
Experts at Global Investment Strategies have conducted some surveys to assess the situation. Below we have listed a few downsides of counteroffers based on those surveys.
It doesn’t address the underlying problem.
Leaders must ask themselves if the counteroffer can address the underlying issue that has motivated the employee to resign. Analyze if the presented offer is enough to keep them happy and motivated or if it will work like a Band-Aid to avoid more significant issues.
Counteroffer should be equally valuable for the employee and the company. Leaders must first check why the respective employee plans to leave the company. It will help you understand if this is all about promotion or money. Maybe, some of them are going to the job due to excessive workload. It is better to have a detailed conversation with the employee before proceeding with any decision.
It may put doubts about your leadership abilities.
The counteroffer outcomes may soon become the reflection of your inherent leadership qualities. For example, when you ask an employee to stay after their resignation, it is vital to be sure they accept the offer. But they will not be convinced if your proposal is unsuitable for their needs and expectations. Such scenarios may reflect your poor leadership qualities while posing significant damage to your brand.
At the same time, such counteroffers can negatively impact the morale of the entire team. If you present a better offer to someone about to leave, it hampers the trust of those who are here to stay. Therefore, it is first necessary to assess the situation carefully and understand what kind of counteroffer you should present to make them stay. A thoughtful decision may help prevent spending time, money, and energy on the wrong people.