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  • Writer's pictureMy HR Guy

Back Away from the Counter!

In the past, I've talked about "Making it Rain," and I still stand by that, but it's important to know when to apply this.   

I've partnered with a few clients lately that have made counter offers, for departing employees, a fairly standard procedure.  To be clear, I'm not a fan of counter offers for departing employees; counter offers during the initial offer is a different story.  The reason im not a fan, in most cases, is that it sends the wrong message.  If you love me, tell me you love me frequently, not when I'm about to walk out the door.

Basically, if you're willing to pay me this amount of money now, acknowledging it's the fair market value for my role, why weren't you already paying me this amount?  It doesn't make sense.  And then, moving forward, can I trust that you'll continue to compensate me equal to my value, or will I have to threaten to leave again for that to happen?  

You may have a happy employee temporarily, but long term, you may have an employee who doesn't trust you. 

My guidance is that as an organization, we should always be paying attention to what the market is paying for the skillsets we employ, and do what we can to compensate the current team competitively.  Define your meaning of competitively and stick to that payment philosophy.  Because that's the other risk...someone you value threatens to leave because they've been offered some crazy amount.  You decide to match that amount, but in reality they were going to be overpaid, and now you're stuck overpaying the person. 

Also, know that money is like sex in a relationship; It could be a problem if you're not getting enough of it, but getting enough doesn't mean you'll stay.  There are many other reasons why people leave, or stay at, their job.  Money is usually not top 3.  So, if you're going to make a counter offer, it should be focused on the other things that may be important to that employee.  What kind of growth would they like to see in the next year?  What types of assignments would they like to work on?  Is there additional flexibility their looking for?  These are the types of things that can help you determine how to keep the employee happy.

Even better, don't wait until the employee has given notice to ask these questions.  Talking to your employees about these items on a more regular basis goes a long way to keeping them with you.  And don't just ask the questions, but actually take action, because no one likes being asked what they need, only to have that be ignored.  

So, to recap.  

1. Get salary data for the local market.

2. Set and stick to a compensation philosophy.

3. Understand the needs of your employees and meet them as best as possible.

4. If a valued employee resigns, understand why.  Make appropriate changes to prevent future losses.

5. If a counteroffer is made, don't focus on money.  If money is included in the counteroffer, be sure to stick to your compensation philosophy.

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