Counteroffers: Show me the money!
Today’s tight labor market has pushed employers to go to greater lengths to retain their employees. What keeps those employees from walking out the door? No, it’s not gym memberships, fancy in-office espresso machines, or catered lunches. Flexible work schedules, professional development, and potential for growth certainly sweeten the pot. But what do employees really want to remain with their current company? In the wise words of Jerry Maguire’s Rod Tidwell… “Show me the money!”
Employers beware, however. The Counteroffer is not the golden ticket to keeping your employees around and happy.
Here’s what you need to know…
CounterOffers buy you time… but not much
80% of employees leave the organization nine months after accepting a counteroffer. Why? Because money was not the root cause of their unhappiness. Remember, nobody wants to job hunt. It’s a part-time job in of itself. So, if your employees are going through the painstaking process to leave your organization, there’s a pretty compelling reason, and that reason still remains long after the first few higher paychecks are deposited.
CounterOffers are going to cost you… a lot
Just as salaries have increased over the last few years, counteroffers also have. In previous years we’ve seen counteroffers to top performers in the 10% range. In the last two quarters we’ve seen counteroffers in the 20-40% range. While there is certainly a threshold for what companies can reasonably offer (and we believe we’ve reached it), that threshold is high.
Counteroffers won’t make up for poor leadership.
“People don’t leave jobs, they leave managers.” “One of the biggest problems in the working world is that an invisible, impermeable wall can build up between what employees would love to say and what the leadership team can stand to hear,” according to Forbes. Are you open to discussions about changes in policy or procedures? Do you know your employees’ career goals? Have you let your employees know they are part of the organization’s vision for the future? Do you meet with seasoned staff to see if new hires are adapting, growing, and fitting in with the vibe and culture of the organization? Do you honor employees for their hard work and contributions? Your answers to these questions give you insight into your leadership skills and what you might want to work on in the coming months.
CounterOffers are REactive. Good leaders are PROactive.
The best way to solve a problem is to prevent it from occurring in the first place. As a leader, it’s your responsibility to know how your team is doing; the only way to do that is to communicate consistently. Schedule “career conversations” with your team to discuss career goals and your vision for their future with the organization. Proactively discuss your employees’ job satisfaction. Ask them about the company culture – whether it feels inclusive, accepting, and safe. Lastly, look at your high-performers to ensure their compensation is competitive and compelling enough for them to stay. Many organizations are getting creative and offering off-cycle bonuses.
Employers: Keeping your finger on your organization’s evolving needs and expectations will go a long way toward retaining happy and satisfied employees, preventing you from having to woo them back with high-priced counteroffers.