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.

A lesson to jobseekers everywhere - beware the counteroffer!

In today’s recruitment market the counteroffer has become a go-to staff retention tool.

As talent shortages persist in key industries, counteroffers are a last-ditch attempt to keep hold of staff. Critically, we believe they don’t offer long-term solutions to the question of why you want to leave a job in the first place unless the offer is tangible, meaningful and personal.

The reality of counter offers.

Most people will get a counteroffer at some point in their career.

“Up to 50% of candidates who resign will receive a counteroffer” from job to job, so strategising a response to one is wise.

Naturally, this strategy should go hand in hand with the reasons why you want to leave in the first place. It could be that you don’t feel rewarded, either financially or promotionally. It could be that you feel disassociated from the direction of the company, or simply that you need a change.

Counteroffers are, in our view, broad-stroke “solutions”. They are often not specific or personal enough to warrant acceptance.

Here’s why.

The Fix.

It can seem like a counteroffer does offer a fix - bosses will wrap up a counteroffer in a sweet package of more money, perhaps a new job title, an acknowledgement they “haven’t been fast enough at picking up on things”, or “we really want to give you the position you deserve now” and so on and so forth.

In reality, the vast majority of counteroffers are a poor HR sticking plaster.

They are mostly reactionary offers: short-term fixes to long-term problems. Throwing money at those sorts of issues never works. Only a small proportion of people leave jobs because of a lack of money. It's much more holistic than that.

Sadly, the stats back this up. Candidates should be aware that for all the attractiveness of a counteroffer, accepting a counteroffer is productivity and job happiness suicide unless the offer is truly personalised and it addresses the root causes of why you want to leave a job.

New job, old issues, and short-termism.

For candidates with one foot out of the door and into a new job, a counteroffer can seem like a sweet victory - finally, the job you worked for is offering you everything you wanted! They are offering everything your new company is offering, but you don’t need to faff around with onboarding because you already know the systems!

But as with many things in recruitment, if it's too good to be true, it often is. The most salient piece of research around counteroffers contains the following:

• “80% of employees that accept a counteroffer leave within six months and 90% within a year”.
• “50% of candidates that accept a counteroffer from their current employer will be back on the job market after two months”.

Counteroffers are not, in the main, long-term solutions to job dissatisfaction.

Your immediate response to a counteroffer.

So when faced with a counteroffer our advice, and the advice we give jobseekers, goes like this:

1. Never forget why you’re leaving in the first place. Constantly refer to the emotions and professional reasons you decided to hand in your notice in the first place. Analyse them, and hold them close.
2. Take a breath. Agree to nothing straight away. Ask your boss to put any offer, or any discussion around a counteroffer, in writing.
3. Allow yourself time to take the offer in. If you are utilising an external recruiter, speak to them and ask them for their advice. Unless the offer is exceptional, they will say what I say - it’s too little, too late, they’re panicking, and it’s not your responsibility to cover for them while they look for a replacement, because they will be looking for one.

But in an effort to be fair here are some examples of when to take, and when to decline a counteroffer.

When to accept, or not accept, a counteroffer.

Did the boss sit down with you?

• By this, we mean did the boss see your letter of notice and simply ping off a knee-jerk response saying “I’ll see what your new job is offering”, or did they offer to sit down and discuss your position in full?
• In short, if a counteroffer is going to be offered you want it to be tangible, realistic to your position, and packaged to answer every reason why you wanted to leave in the first place. If it isn’t, don’t accept it.

Is the counteroffer an actual “package”?

• By this, we mean is the counteroffer simply an offer of more money, or does it take a full-spectrum approach to every point of contention in why you want to leave, and aim to answer them all? Does it give you timescales, realistic KPIs to hit to improve performance or a roadmap for advancement? Does it make you happy?
• Our advice is never to accept a counteroffer that doesn’t take a total, personal, positive approach to your job, career, happiness and skills development.

The one question a counteroffer needs to answer.

After the above two criteria have been answered, ask yourself this one question: would I have gotten all the above if I didn’t quit in the first place?

If the answer is no, don’t accept the counteroffer. You should never have to twist an employer’s arm into recognising good work and rewarding it appropriately.

Summary.

In our view, the majority of counteroffers are never worth the stress and effort. In very rare circumstances are they worthwhile.

They are generally offered when the worst of the workplace damage has been done, and are done as a knee-jerk reaction to someone quitting.

As highlighted above, they are not long-term fixes for job satisfaction and we always urge any candidate facing a counteroffer to never forget why they handed in their notice in the first place!

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.