We keep hearing about the Great Resignation, where employees are flocking in droves to new opportunities, resulting in businesses losing staff in record numbers. Some of these employees are looking for something new in the wake of the pandemic. Others have been passively searching for months and now feel confident enough to pull the trigger. So, as more employees announce their resignations, it can be tempting to counteroffer to hold onto your valued staff members. However, is this the best solution to your staffing crisis?
Counteroffers can be a quick fix
There can be a slew of reasons why your staff members are looking for greener pastures, but more often than not, money is at the root of it. Sometimes the easiest way to get a raise is to make a career transition, especially in today’s candidate-driven market. Employers desperate for talent are offering highly competitive compensation plans to entice job seekers to make a move. So, when one of your top employees turns in their resignation letter, a counteroffer may seem like your best method of attack. A counteroffer can help retain talent during a time when it’s challenging to attract new employees. Also, it eliminates the expensive costs and time required to recruit new candidates.
However, presenting a counteroffer is often only a quick fix and can generate other issues for your company.
The problems with countering a resignation
Counteroffering when an employee tries to resign can be like putting a bandage on a flesh wound. It might keep this employee happy and engaged for a bit, but how long until they start looking again? Can you ever fully trust them and have faith that they are committed to the team? The extra money or benefits might entice them to stay for a time, but the reasons they started looking in the first place will likely resurface.
Additionally, counteroffering with a pay bump can cause a ripple effect with the rest of your staff. If someone gets wind that another employee got a pay raise because they tried to move on, they will likely take the same route. As more employees approach you seeking a raise, you will have to continue to hand out more money, which makes this counteroffer more expensive than you initially thought. This slippery slope will only increase your pay disparity throughout your organization and contribute to pay inequality amongst your staff.
Defense is the best offense
The more efficient way to avoid this predicament is to create a strong defense. Instead of acting reactively, it’s time to be more proactive. Offer your team competitive salaries, benefits, and room for growth. Check in with your employees often and ask them for feedback, which will foster a more attractive employee experience and culture. Also, offering flexibility, healthy work-life balances, and encouraging your staff to come forward with suggestions will improve your employee retention and help you attract even more talent.