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The LLoyd blog: hidden talent.

The Counteroffer in the Era of the Great Resignation

4.2 million individuals voluntarily resigned in October 2021.
For more than 6 months in a row, workers have been quitting at alarming rates. In total – 38 million people have left their employers since January.
It appears that quitting your job is the new pandemic, or at least an outgrowth of the current one.  There is apparent employment discontent from coast to coast.

The Great Resignation may seem like media hype, but for the most part, it appears real for those who left jobs that they didn’t “feel passionate about.”  Covid made people rethink their careers and decide to live a “life’s too short” mantra.

So – what are companies supposed to do?  Is the answer more flexible work arrangements?  Increased wages?  Maybe childcare support?  For many the answer has been to put a counteroffer on the table when an employee tenders their resignation.

It’s like a “Hail Mary” football play to try and save a worker who they perhaps did or didn’t know was dissatisfied.  The problem is the counteroffer is fear-based for employers and ego-based for employees and the truth is, it almost NEVER works no matter which side of the offer you are on. “Prior to the pandemic, we would encounter a counteroffer maybe 10% of the time during a search – now it’s grown to about 25%. An employer feels compelled to offer one because they are thinking of the damage the departure will do the business in terms of intellectual capital, stalled projects and the empty seat they have to scramble to fill. It’s really not so much because they want to make an individual happy – although most employees hope that to be true,” notes Jason Banks, CSP, Executive Vice President of Lloyd Staffing.

In Lloyd’s 50 year history we can count on one hand the few times a counteroffer has had merit – for either party. Instead, consider these facts:

FOR EMPLOYERS…

  • More than 75% of employers make a counteroffer to buy some time to replace their unhappy employee and once found, the discontent individual is terminated.
  • Employers acknowledge that employees who accept a counteroffer will still leave the organization; in fact, 89% depart within six months; only 7% actually remain with their employer.
  • Approximately 30% of employers extend a counteroffer because they want to hang on to a high performing employee and not lose him/her to the competition.

FOR EMPLOYEES…

  • Greater than 80% who stay still find themselves with the same title, with none of the promised changes in duties, schedule, workload or salary.
  • More than 50% who were promised improved compensation, never get a credible increase.

 

The average person wants to believe that their employer will finally appreciate their skill set and respond with more dollars, a new title or a perhaps increased respect for the job they do.   Though we know it can be a very heady experience, we counsel our candidates not to accept a counteroffer and that’s not because recruiters are putting their own needs first. It’s based on a long history and experience in the employment space and what we’ve seen happen to both sides who walk the counteroffer tightrope.

TEMPORARY FIXES RARELY OFFER LONG RANGE SATISFACTION
We believe a counteroffer is a temporary fix to a problematic situation and almost always, the candidate is the loser while the client incurs valuable time wasted on bad staffing maneuvers. It will forever alter an individual’s relationship with their employer, no matter how much they think it won’t change.

Why is something that sounds so promising not really a good career move or retention strategy? First and foremost, the company knows the employee was almost out the door, mentally and physically. His or her loyalty and commitment will always be in question, even in the best work relationships. That trust is very hard to restore since the employee will always be perceived as a flight risk. Perhaps just as damaging is how the work relationship between the individual and colleagues may sour. Those that believe a new title, duties or more money was a manipulative tactic may treat the individual differently, even their best buddies. Before ever saying yes, think carefully about your situation. Something wasn’t quite right or you likely wouldn’t have considered a change in the first place. Are you simply settling for what’s comfortable, versus pushing yourself to the next level?

And if you are an employer who extends a counteroffer what does this say to the rest of your team – are you rewarding bad behavior?  It can make loyal employees distrust you and build resentment and low morale. Can they say they’re leaving and get a better deal too? If you truly value your employees make them feel appreciated; respond to concerns, offer challenges and duties that match an individual’s capabilities and career goals.

Counteroffers are corporate defense mechanisms. They aren’t really what’s best for anyone.  Instead of counteroffers, Lloyd advocates what has now become known as “Stay Interviews.”  This is a conversation an employer has with an employee in order to discover what they like and dislike about their current role and what changes they need to continue to feel engaged and motivated.   Instead of asking the why-are-you-leaving questions, it’s basically asking how an individual’s work experience needs to change so that they can envision staying on for growth and greater responsibility.  For employers is an effective thrive tactic, instead of a counteroffer’s panic-based survive strategy.  Companies must know what would make an employee leave so they don’t find themselves vulnerable to unexpected exits.

Similarly, an employee should evaluate what she or he has before giving it up or losing it. If you have any sort of discontent, verbalize to your manager or company leadership what you feel would make your role and employment situation more personally satisfying to you. See if changes take place before you give in to the current resignation persuasion.  After that, if you’ve expressed your dissatisfaction with your position and your employer has not made any attempt to remedy the situation, it’s time to go. Make up your mind and stick with your decision. Turn in a courteous, professional resignation letter. Resign gracefully. Don’t leave any room for further discussion. Behave honorably and don’t burn any bridges.

More than ever, all of us have learned in the last 20+ months that the choices you make in your life will make your life.  Time is precious – choose wisely.

 

#counteroffer  #greatresignation  #stayinterviews

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