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Counter Offers: Avoiding the Temptation to Keep your Own

The unexpected resignation of an employee is never welcome or well-timed. When an employee decides to move closer to an infirm mother five states away, that’s one thing. But when an employee resigns with the announcement that he’s moving cross-town to a similar position with your fiercest competitor, that’s something else altogether.

In that case, the employer’s reaction is often emotional, even panicked. It is common for a manager to react with haste and issue a counter offer. Whether the employee takes it or not is in a sense irrelevant. Because, considered rationally, counteroffers set a dangerous precedent. Word gets around in small companies as well as large. In a company that is prone to counter offers, there might as well be a sign in the break room that states that the company is giving out raises to anyone who threatens to quit. It is possible that other employees might start using resignations to get raises for themselves.

Before long the internal wage structure of the company has been violated. "Actually it's cheaper to just replace the person," says Frank Bruckner of Kimmel & Associates. "It's better for the overall morale of the staff, too."

The main point, though, is the fact that an employee has spent considerable time and effort to look at other opportunities. He has been in the offices of your top competitors discussing your projects and plans. The reasons that led him to interview won't go away just because you start throwing money at him. His loyalty and dedication should be questioned. If an employee isn't truly content, the team would be better off without him.

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