To Counter or Not to Counter?

It’s not the worst feeling in the world, but it’s near the top of the list. A high-performing team member walks in the door and says, “Do you have a minute?” You’re not sure what’s coming but the list of possibilities starts running through your head. Someone got hurt on the shop floor. A key customer is taking their work to another finisher. There’s an environmental issue that everyone was afraid to mention. A customer’s parts were damaged in processing and they have requested a six-figure settlement.

As the pit starts forming in your gut you brace yourself for the news and say, “Sure.”

“I don’t quite know how to say this, but I’ve accepted a position with another company.”

They pause for a moment, letting the news settle in. “I swear I wasn’t looking for anything new.” They always swear they weren’t looking. “But a recruiter called and it’s a lot more money. I have to do what’s right for my family.” They always say this too, it’s a statement impossible to argue against.

The range of emotions and questions cascade over you like a waterfall. How could she betray me like this? Maybe I should have been a better supervisor. What if he’s going to a competitor? After all I’ve done for them, they do this? How am I going to run this business without her? He’ll live to regret the day he ever decided to leave our company. I hope he hates his new job.

Now comes a decision. This is a key member of the team. Nobody is irreplaceable but some are more replaceable than others and not having them on the team is going to set you back. You’ll have to start recruiting a replacement and find a way to fill their role on an interim basis. Then you have to train the replacement, and it could be years before they know as much about your business as the departing employee does.

Wait. They said the new job was a lot more money. I wonder how much more. Recruiting and training a replacement will take time and money too. Maybe I should offer them more money and see if they’ll stay. Should I?

No! Here’s why.

First, an employee’s act of giving notice of their intent to resign always leaves in its wake a sense of betrayal. Certainly, employees are free to choose whatever career pathway is right for them and nobody is expected to stay in the same job forever, but once a team member makes the decision to take their talents elsewhere the fracture in trust that results, however small, is really difficult to get over. From experience, I can share that you never quite look at that person the same way again.

Second, while an employee may point to compensation as the reason they accepted a new position, the root cause of their departure often goes deeper. Roles that don’t lead to long-term growth, don’t align with an employee's own personal values, don’t provide meaningful work and require working with people they would prefer not to are all identified by departing employees as reasons for their departure. Money is the easy one to measure, but it’s likely that an individual’s dissatisfaction with their compensation isn’t the only part of their job they don’t like. Fixing the money problem does nothing to fix the others.

Perhaps that’s why research indicates that more than half of employees who accept a counter-offer end up leaving their employer anyway in the ensuing 12 months. Providing a raise doesn’t fix the problem, it just delays it to a future date.

Consider these reasons, too. Providing a counter-offer with greater financial rewards is essentially an admission that the person was underpaid in the first place. This sends a message to the employee that they were taken advantage of pre-counter-offer and fractures the employee’s trust in the employer. Further, none of this happens in a vacuum and other employees will soon find out about the counter-offer. Will these people get the message that the way to get a raise is to walk into the front office with a resignation letter?

Finally, I am always amazed at how some members of the team will step up to fill the void left by a departing team member. Such situations provide those who remain working for the company the opportunity to showcase their skills and prove they are up to the challenge of greater responsibility. Oftentimes I have watched team members rise to the occasion to take the role of a departing colleague and it occurred to me a year later that the company was stronger for the process of replacing a key team member who chose to work elsewhere.

Counter-offers may provide a band-aid to the disruption caused by losing a key team member but they rarely solve the root cause of the problem. Accept the resignation with humility, genuinely wish the departing member good fortune, and get on with growing your company – without them.