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.