When an employee quits what will you counter-offer?

It looked like the week was off to a great start until a really valuable employee came into your office to announce their resignation. Panic sets in with visions of covering the workload, lost sales, production declines or disappointed customers. Instinct and defense guide you to offer the employee a nice fat raise to stay. The employee stays and everyone’s happy, right?  Maybe.

 Don’t make that counter-offer so quickly. I have rarely seen counter-offers work as an effective long term solution.

 Whether the employee started the job hunt or took a call from a head hunter they have just interviewed for, and accepted a new position. It’s exciting to anticipate a fresh opportunity. Long before they spread the word it’s likely that they emotionally resigned.

 The extra money may tempt them into staying and keep them happy for a while, but will you give them a 20% raise next year?  When news leaks out about the windfall are you prepared to continue this precedent when the next person quits?

 Managers eager to counter-offer forget to delve into the reasons for the resignation.  It may not be all about the money there could be other factors that additional cash won’t change.

 Take time to identify the reasons behind the move and the potential impact of a counter-offer. A more reasoned response could include some job changes or perks that don’t add to base pay. You may also shake the person’s hand, wish them well and make a reservation for the farewell lunch.

 Whatever you do don’t bad mouth another employer, negotiate endlessly or diminish the employee’s value in any way. It’s a small world you might work together again and it could be at another company.