Resignations aren’t always a clean break. If an employee receives a job offer elsewhere and decides to resign but the employer isn’t prepared to let them go, the possibility of a counter offer may make its way to the table.
While offering to increase an employee’s pay or salary may entice them to want to continue the working relationship, there are a few pitfalls both parties need to be aware of before venturing down that path.
Here we discuss some of the implications of using counter offers to retain an employee from both sides of the fence.
Responding to a counter offer as an employee
As an employee, a counter offer can be very tempting—not only are you already comfortable in your role, but you’ll be earning more money for doing the same job you currently do.
While a counter offer can seem like a perfect solution, it’s important to carefully consider your decision while paying close attention to the reason you started applying for roles elsewhere in the first place. While salary is always an important factor, it’s rarely the only factor that led you to where you are.
In most cases, the decision to start applying for other roles will also be driven by other factors such as the desire for a new challenge, dissatisfaction with various aspects of the role or a broader cultural issue within the dealership. Without those underlying factors also being addressed, a pay rise will only act as a band aid with the same issues likely to resurface again in the future.
Accepting a counter offer can also impact the way your employer views you. Some employers may assume that it’s only a matter of time until you resign again and start making preparations to replace you as soon as that does happen. They may also be less likely to want to invest in extra training or professional development.
In many cases, the employer may also place more expectations on you, expecting greater output in lieu of the additional remuneration they’re providing. If you’re already unhappy within the role, the extra pressure is unlikely to sit well and further exacerbate the issue.
The best way to approach a counter offer is to treat it like a job offer. Never accept a counter offer on the spot—take some time to weigh up the pros and cons and really think it through before making a decision.
The likelihood of being fulfilled at work will decrease from the moment you accept a counter offer, and the opportunity to leave and start fresh with a new dealership may no longer be there in a few months. Unless the underlying issues behind wanting to leave are also being addressed, it’s a smart move to approach any counter offers with caution.
Making a counter offer as an employer
As an employer, it’s easy to be caught off-guard when a seemingly contented employee hands in their resignation out of the blue. If you’re unprepared and unlikely to be able to find a replacement before they leave, a counter offer can seem like a great option to entice them to stay—but it’s usually only a temporary fix.
In fact, recent articles have highlighted the following important statistics about counter offers:
- around 80 per cent of candidates that accept a counter offer from their current employer end up leaving within 6 months, and
- around 50% of candidates that accept a counter offer from their current employer are actively looking for employment again within 60 days.
While offering an exiting employee more money to stay may help you in the short-term, it’s unlikely to yield a good long-term outcome. In most cases, if the employee doesn’t see a tangible change in their job, they’ll just end up delaying their departure until a little further down the track.
Here’s an example—imagine you have a Diesel Mechanic that loves the technical aspect of their role, but they’re continually expected to perform a range of additional customer service tasks for no extra pay. While an offer of increased pay may make the prospect of staying with the dealership more attractive, if the role still has a heavy customer-focus, after a few months they’re likely to recommence their search for other roles where they can focus their efforts exclusively as a Diesel Technician.
If the dealership will be in a very tight spot when that employee leaves, a counter offer could be a good way to tie you over until you’re better prepared to cover the position, it’s best not to view it as a complete solution.
A good approach to avoid finding yourself in this position is to encourage an open dialogue about pay and conditions with employees. When employees feel they can air any concerns or issues about their role or remuneration, you’ll be more likely to spot a resignation coming before the fact.
Counter offers aren’t always bad…
While counter offers are rarely an ideal scenario, they can be effective in some dealerships.
In an ideal world, employees and managers would feel comfortable talking openly and honestly about their level of satisfaction with their workplace. However, discussing the topic of pay and conditions can feel awkward and most employees simply prefer to leave things unsaid.
Where the issues an employee has with the role are a relatively simple fix, counter offers can have a positive impact by forcing these conversations to come to light so that any underlying issues can be addressed. While resigning in the hope of receiving a counter offer is never a good approach, when the necessary changes can be made, the process can result in a happier, more fulfilled employee moving forward.
While counter offers can occasionally lead to a positive outcome, it’s paramount that neither party rush to reach an agreement—after all, if the agreement doesn’t involve real change that addresses the employees core concerns, it will only be a matter of time until the issue resurfaces.
Teamrecruit is Australia’s most established recruitment agency specialising in truck, earthmoving and agricultural machinery dealerships in Australia, New Zealand, the South Pacific and Southeast Asia. Find out more about Teamrecruit and how we support employers and candidates in the dealership industry.
