All companies will face the situation when one of your valued employees walks into the office and says they are resigning to take up a job with another employer. The question is, what do you do? Should you make a counter offer? And if you do make one, how should you do it?
You should firstly take into consideration that studies have shown that 69 percent of employees who accept a counter offer leave their current employer within six monthsof accepting that counter offer. The problem is that a counter offer often only addresses the employee’s concerns in the short-term and can simply act to postpone rather than cancel the inevitable exit. So, in short making a counter offer does not really work in the long term or even medium term.
You really need to consider the following before making a decision, take the time and be 100% sure that this is a considered process and not a snap decision. It must be in the best interest of the business, as sometimes a change, “new-blood” is not always a bad thing.
Is the employee really irreplaceable?
Consider the loss of this employee, and what are the real consequences of this employee leaving and how quickly can his or she be replaced?’ I mean, could the employee be replaced in a reasonable time with an equal or better performer, at a comparable, possibly even lower pay rate? Especially in the current climate, there are candidates with outstanding skills and commitment ready to offer their services. Take the time to call your recruiter and ask them – “can you find someone? for me” understand the market.
Over the 12-month period do you think you can bring in a new employee who can provide a similar or better output and a lower/similar payroll bill as a result of your new hire and letting this one go? If so, then you may feel that a counter offer is not essential and you might consider easing the employee’s path to exit by not counter offering.
Remember, employees have to leave some time; statistics show that the average employee might hold up to 10 jobs in a lifetime, so you might want to be a little philosophical about it if the employee has served well above your firm’s average tenure.
Always ask for evidence of the job offer
If you really do feel that the current employee is irreplaceable I would highly recommend that you only consider a counter offer once you have written proof that a job offer has been made, be that email or contract. While I would love to say that we would all be 100% honest in the level of remuneration, new job level and responsibilities, some employees will take advantage of the situation. Do not make a decision which could come back to bite you.
Counter offers don’t always have to be about remuneration
If you do decide to make a counter offer, remember that it does not have to be financial, while yes, a higher salary always helps, many people are looking for career progression, growth, and the opportunity to prove their ability. You should have some idea of the employee’s all round frustrations and motivators, be that lack of career progression, boring job, wanting to work more flexibly, etc. Sometimes it is more of a personal reason, does the employee want to be closer to family, in an area where there are better schools – can you relocate them? Once you understand all these factors you can then tailor a counter offer which is most likely to offer the employee the best outcome and encourage them to stay.
In our opinion, unless the employee really is invaluable your business, don’t do it. The employee looked around for another role, and their commitment to your company will never be as strong.
If you are in this situation, please do not hesitate to call our Consultants, we are here to provide guidance, and with over 50 years combined experience behind us, we have seen most situations that can occur.
3 Tips to Build the Best Team in 2015
It takes a whole lot of work to find really great people to make your business soar. But what goes into a strong team? Check out these great tips as you expand your business this year.
1. Size isn’t everything
Having a large number of employees does not guarantee a better output and standard of work, but having the right people does. As the person in charge, you are responsible for determining your company’s needs, looking at each worker, identifying their strengths and weaknesses, and figuring out where they fit best on the team. It’s got to be quality of quantity. You’ll save your firm a few bob too.
Hire interns and have them work for you for a few weeks so you can get a sense of how they work. Interns usually join a company to get experience and network while getting school credit. The time during the internship is a perfect opportunity for you to see how they work and get to know them much better.
You get them for a much as six months so you’ll get to know if he or she is motivated to work and eager to learn? Is he or she punctual? Does he or she fit in the company culture?
3. Your team should motivate you… daily
In any job, sometimes it is difficult to keep positive vibe nice and high. It’s a huge thing if your team can motivate you and keep you going. When your team members are good at what they do, know their roles, and are creative and reliable, it frees you up to concentrate on the company’s big picture and next step. I can only think about the future when I know the situation of the moment is taken care off. Tidy house, tidy mind as they say.