A pending or skip level early promotion, an exorbitant salary raise or a new profile — counter-offers may appear in many forms. However, there are hidden disadvantages.
Talent is the most expensive and treasured asset for any organisation, and so, it is naturally not easy for them to let go of it easily. Organisations try all interesting and unique ways to keep their talent engaged and go to great extents to retain them, if need be. Most organisations try and make lucrative retention offers or a counter offer to someone who may have resigned but needs to be retained for the benefit of the business. A pending or skip level early promotion, an exorbitant salary raise or a new profile — counter-offers can be either of these, or a package. However, there are hidden disadvantages. Whether to really accept a counter-offer is a dilemma that many face. Here is what the experts believe.
Sailesh Menezes, director-human resources, Hewlett Packard Enterprise
The counter offer will provide a temporary and unsustainable spike in the employee’s level of motivation, which will fall back to the earlier level in a matter of weeks.
Counter offers are often in the form of a financial or monetary pay-out, be it immediate or deferred. However, employees choose to exit organisations for a variety of reasons, which may not always be addressed by the counter-offer made by the organisation. Hence, accepting such an offer may often not be sustainable, especially if the core reason for the leaving employee’s dissatisfaction lies elsewhere. It has been proved that in most cases, a majority of employees, who accept counter offers exit the organisation within the next 24 months.
Certainly, the counter offer will provide a temporary and unsustainable spike in the employee’s level of motivation, which will fall back to the earlier level in a matter of weeks. Counter-offers have mostly been proved to be more of a material enticement, one that will not last long.
Last but not the least, the signal/decision to exit followed by the counter-offer may at times lead to a deterioration of one’s relationship with the organisation, which can lead to doubts about the employee’s future commitment.
Murthy MVS, chief people officer, nuFuture Digital (India) Limited (Future Group)
Money cannot be used as a bait to get individuals to stay while they may actually be struggling in the work environment. It would be a total loss for both the employee and the organisation in the long run.
Accepting counter-offers wasn’t considered a great practice a few years ago. However, with the kind of talent movements in the current generation, it’s not so much of a taboo anymore. Yet, there are aspects that one should consider.
For those who may be leaving owing to dissatisfaction in their current role, or because of culture, organisational values and relationships at work, accepting a counter-offer will not be wise. If the counter-offer is mostly monetary, it may not be the best bet for someone who may have decided to leave the organisation. Money cannot be used as a bait to get individuals to stay while they may actually be struggling in the work environment. It would be a total loss for both the employee and the organisation in the long run.
On the other hand, in a situation where one may be leaving only for a better salary and with no other complaints, it may still make sense for one to accept a counter-offer. Yet, this may be a short-lived respite for the organisation as it doesn’t guarantee that the employee will stay for long. After all, there is always a chance of some other organisation offering an even better salary in the near future, with which that employee may end up achieving a higher raise in the salary.
Ravishankar B, independent senior HR advisor
I have observed that high performers are usually the first to resign and a good professional never stays back just for more money or promotion as a counter-offer.
One should certainly refrain from accepting a counter-offer if the reasons behind leaving are job related or promotion related, because if you do, people will remember it. The system always remembers someone who threatens an exit to achieve what they want. After having accepted an offer, at times the boss’ approach towards the employee may change. A sense of negativity tends to prevail in such a scenario.
Moreover, after having accepted a counter-offer that includes a higher salary or a promotion, an employee may further delay their normal course of promotion in the organisation. I have observed that high performers are usually the first to resign and a good professional never stays back just for more money or promotion as a counter-offer. In most large organisations, the success rate of retention offers is not more than 20 per cent.
In addition, for someone leaving for a better brand, accepting a counter-offer makes no sense as that would just be a short-term victory, and they will actually lose out in the long term. However, if salary is the only criteria for leaving the job, then, it is better to have an open conversation before putting down the papers or simply accepting the counter-offer without concerns.
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Talent be recognised appropriately and timely with compatible role, designation, salary and perks by organisations not to resort to counter-offers;
at the time of recruitment, confirmation, at the time of annual increments, successful completion of a successful project, when taking up higher role and charge; not behaving stingy, benchmarking within and withou,t without the performing employee having to negotiate for salary.
While greedy employees sans vision, values, competencies, stability, negotiating attitude be allowed to go, not allowing one apple to spoil the other apples, setting a wrong precedent, for others to follow, receiving many more such requests and recommendations.
HODs/Sr Managers need to be instructed by management to take things in stride and not forward meek recommendations to please their subordinates, and at times looking for upgradation of their own salaries in the guise of recommending for subordinates during interviews and at other times.
Streamlining organisation structure, salary benchmarks, reward and promotion policies once for all in a rational manner based on the competition, capacity to pay, and other strategic factors – reviewed now and then, and every year in contemporary times, which a company like KOEL has been doing it way back since pre-1993 days.
best regards,
kshantaram
At times giving counter offers to the employees who have made up their mind to quit the organisation may help the organisation initially for few months, but in the long run it may not work effectively and also leads to indifferences between the colleagues and immediate bosses and also similar grade employees in other departments. Morale will be decreased and productivity may reduce in a phased manner. Leads to frustration and other team members may not be willing to extend their full support and cooperation. If at all any such offers has to be given same can be extended much before submitting resignation or during appraisal exercises so that other team members will not know what has happened. It is always better to retain good talents with in the organisation as it is very difficult to source similar talented hands and also to train them upon joining is also very time consuming and lengthy process.
I am shocked that nobody — the HR professionals AND the editorial intro to this story — has bothered to stop and consider the ethical aspect of the situation. One would assume that most resignations are put in after the employee has accepted another job offer. Which, incidentally, involves much hard work and process by the future employer. What happens to integrity of the employee who uses an offer letter just to up her/his package in the current organization?
Crazy. Is this what individual behaviour and HR consultancy have come to? There is one single-word answer to the question that’s had éxperts’ beat circular furrows: Never.