Counter offers

What is a counter offer? Counter offers can cause a fair deal of stress and anxiety for both employee and employer. If you resign from your job after finding a new opportunity and your employer decides to offer you a better salary, a promotion or both to stay, then you've experienced a job counter offer.

Disadvantages of counter offers

As companies grow increasingly concerned about retaining critical staff, they may be tempted to extend counter offers to employees who plan to leave for another job. But counter offers often cause more problems than they solve. Here are four key drawbacks of counter offers to consider:

Trust may never be the same: Once an employee plans to leave, managers may no longer view the professional as a loyal team member. Conversely, the employee may begin to question why it took the threat of departure for the company to recognise his or her value and make improvements to the job.

Some things can’t be changed: Although financial concerns may be addressable, there may be additional considerations that can’t be resolved. For example, old conflicts with other staff members or incompatibility with the corporate culture may continue to cause the employee dissatisfaction, even after a raise has been awarded.

Salary adjustments may be complicated: A counter offer not only impacts the department’s budget, but also potentially affects the entire team. Paying someone more than the typical pay scale could disrupt an organisation’s remuneration structure and create resentment among other deserving employees.

Future advancement may be limited: If competent, productive employees feel there is no room for further growth in your firm, it would be unfair to attempt to convince them to stay. Even with a bump up in salary, they eventually want to move up and will start looking for new opportunities.

Counter offers may solve a short-term problem, but they rarely lead to long-term satisfaction. While the prospect of losing a valued employee may seem daunting, there is a bright side: Managers may uncover new stars on their team or bring in a replacement who brings an even more impressive skill set to the organisation.