Every employer dreads receiving a resignation letter.

And in the age of talent shortages, it can seem logical to turn to a counteroffer as a way to retain talent.

But a rapidly scrambled counteroffer is not the way to go. In fact, in the vast majority of cases, counteroffers are poorly put together panicked responses to a misunderstood situation.

This is because legacy management strategy will have you working to formulas that simply don’t work anymore.

The annual review.

Distant and aloof leadership.

Generic feedback and performance management strategies.

These have been proven, again and again, to not work.

Staff retention means putting aside management hubris and adjusting your performance management and reward and recognition scheme to make sure you never get to the point of counteroffering.

The trick is in ignoring all your protective, responsive instincts and leaning on patient, pandemic-proof performance management techniques.

The key to successful staff retention lies in its sustainability.

Sustainability in this regard means packaging performance reviews and staff management strategies that meet the contemporary needs of your people. It doesn’t mean simply offering what other companies are offering, or getting to the point of having to counteroffer to meet a competitive new job package.

Effective talent retention relies on business owners and HR managers reaching beyond the scope of immediate job demands and take-home pay to drill into the soul of why your staff member works, and what they work for.

• This takes analysis of pay, performance reviews, appreciation of workplace mental health, career happiness, personal growth and more.
• Retention of talent requires targeted contract and workflow management. Most important to this is personalising feedback and operational support.
• Taking a one-size-fits-all approach to staff management won’t work. Context, and specificity, is key.

So here are our thoughts on why counteroffers are never the recruitment and retention fix you think they are…and how to manage your staff better to retain the best-in-class talent.

Money isn’t everything.

• “Only 12% of employees resign due to money”

This alone should tell you that throwing more money at a dissatisfied employee will rarely work. Money is important in retention strategies, but it is significantly less important than connection to company purpose, ESG or career growth, for example.

Get some context, and lead with empathy.

Undoubtedly you’ve been where your employee has been - perhaps eager to start a new role and less than satisfied with their current role. So, staff retention strategy should lead with empathy.

If you try and retro-fit a “solution” onto the “problem” of your employee wanting to leave without understanding the reasons behind it, you come across as callous and impersonal, as if you think any action is worthwhile when what your staff member wants is highly specific, nuanced solutions to their unhappiness.

Above all else, your people want to be heard.

So, engage with them, let them speak, and seek context for their career. What do they work for? Why do they like or not like working for you? These aren’t questions to be asked at an annual review or after someone’s handed in their notice. You should be asking it every week, every day if possible.

Don’t knee-jerk a response to someone quitting.

No right-thinking employee is going to take a hastily written email offering more money or a better job title without a formal meeting and a proper discussion.

So do not reply to a resignation letter with a quickfire counteroffer.

Accept the letter, express your dismay if you really want to, but make sure you formalise a proper meeting to discuss how you can improve their experience at your company.

Allow your employee the chance to prepare, and make them aware you’re eager to sit them down to clearly, and professionally, try and retain them for the right reasons.

Focus on employee positives and how they relate to career and company success.

When it comes to career management and support, focus on what you can realistically achieve for your people. Make development plans personal, and make sure any improvement of position, pay and experience focuses on how your employee’s career is valued in the context of your company.

You should not break salary rules to hold onto talent (see Money isn’t everything above) - this is neither sustainable nor fair. You cannot say things like “we were planning on doing X anyway…” after someone shows a willingness to quit because even if you were, it sounds like an excuse.

Summary

Staff retention requires patience and hyper-personal forms of performance management and recognition.

You want to make sure every member of staff feels connected to company purpose, and tangible company context.

Managers are respected more if they are candid, honest and don’t hide. Use performance feedback and continual feedback strategies as a springboard to engage more staff about their happiness and future at your workplace.

If you follow the above advice, you’ll never get to the point of counteroffering. Which is exactly where you want to be.

Evolve are employer branding pioneers within the MedTech, Pharmaceutical, Life Sciences and Healthcare industries.

To read more about our employer branding service, and how it can help your company develop a market-leading employer value proposition to attract, hire and retain the best talent for your business, visit our employer branding page.