During the ongoing skills shortage that continues to impact recruitment drives, a lot of focus is being placed on talent retention, and it may be tempting to present a counteroffer when an employee says they’ve received a job offer from another firm. But, do counteroffers really work?
While retaining an employee who wants to resign may eliminate the immediate need to recruit to replace them, what impact does a counteroffer have on things like relationships and loyalty, and does it solve the issues that led the employee to want to leave?
In this week’s blog, we’re sharing our thoughts and exploring why, from extensive experience working closely with candidates and accountancy practices, we think you shouldn’t present counteroffers to employees.
The underlying issues
When an employee comes to you and says they’ve received a job offer and they’re considering resigning, this suggests that there are issues with their current employment which have led them to search for a new opportunity.
Perhaps they’ve expressed concerns previously, which they feel haven’t been resolved. Or it could be that they haven’t communicated openly with their managers to address the pros and cons of their current role, and this is the first you’re hearing about it. Either way, it shows that there are underlying issues at play which the employee feels are significant enough to consider ending their employment.
If concerns have been raised but not yet resolved, the employee may believe that the prospect of them leaving would encourage their employer to make the changes that they originally wanted. On the other hand, if the employee felt they couldn’t share their thoughts prior to handing in their notice, there could be issues with management styles or the workplace culture.
Ultimately, is presenting a counteroffer the solution to these underlying issues? Will it resolve the employee’s original concerns or will these resurface later down the line?
According to statistics, around 50% of employees who accept a counteroffer leave for a new job within 12 months.
Relationships and loyalty
So, your employee has told you they want to resign, but you’ve presented a counteroffer and they’ve accepted it. Do things go back to how they were?
The truth of it is, you know that employee wasn’t satisfied in their role. Perhaps they believed they deserved a higher salary, better benefits, more variety in their tasks, or perhaps a more defined route to progression.
There’s a variety of reasons why someone would want to change jobs, and even if the counteroffer initially addressed the employees concerns or wants, is it simply delaying their resignation?
It’s unlikely that things would return to an even keel and the employees loyalty will be thrown into question. Are they likely to look for a better offer elsewhere again? Will they truly be satisfied by the counteroffer? What impact will that uncertainty have on your firm’s ability to plan for the future?
Let’s take a look at the numbers! A study of hiring managers revealed that most wouldn’t even consider giving a counteroffer, but those that do use it as a retention tool and see it as a short-term cure for a long-term problem.
Managers with experience of employees accepting counteroffers believe it sets a bad precedent, with 34% saying it damages employee trust and 30% thinking it negatively impacts employee morale.
A quick fix creates a future problem
It might be tempting to present a counteroffer to delay the need for a recruitment drive, and typically this would be a financial decision more than a personal preference on retaining the employee or not.
However, a quick fix often creates a bigger issue further down the line. With a counteroffer, you’re essentially sticking a small plaster on a big wound and eventually it will need proper treament. Thinking back to the underlying issues that caused the employer to search for a new job, are these concerns shared by other staff? Are there bigger workplace issues than you originally thought? Would facing the problem head on, rather than delaying it, have a better impact on things like retention, morale, and overall business success?
Here at Public Practice Recruitment Ltd, we work closely with talented candidates and ambitious firms up and down the country, and we’ve seen first hand the recruitment challenges that are impacting both sides. As specialists in recruiting accountants into practice, we know the implications a counteroffer could have and we’ve worked with many candidates who have accepted a counteroffer but returned to us to find a new role only a short time later.
It can be hard to say goodbye to an employee, especially if you didn’t see it coming, but from our experience, firms are much better off when they see it as an opportunity to recruit an exceptional candidate who will truly buy into the firm’s culture and future. Whilst the easy option in the first instance is to retain the employee, the better investment is to find talent that will add real value and loyalty to your team. And that’s where we can help. We’re representing some superb candidates who are keen to work with forward-thinking firms, like yours, so don’t hesitate to contact the team today.
Garry Howling, Managing Director
