Should you make a counteroffer to stop a good staff member from leaving?

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Picture this: your best Field Service Technician has just approached you out of the blue and handed in their resignation. They’ve been offered a similar role with a competing dealership for more money, but you have a full schedule of client bookings for the next couple of months and have no idea how you’ll be able to manage them all if you don’t have your employee on board.
 
Making a counteroffer to entice them to stay with your dealership may seem like the perfect solution; but before you jump the gun, it’s important to really think through your options.

Why you should think twice before making a counteroffer

Let’s start with a couple of statistics about the effectiveness of counteroffers.
 
While a counteroffer may make a departing employee rethink their decision, there’s a good chance it will be short lived. In fact, approximately 80% of employees that accept a counteroffer end up leaving within six months anyway. It gets even more dire over the longer term, with approximately 90% of employees that accept a counteroffer departing around the 12-month mark.
 
There’s a key reason why this is the case—offering a dissatisfied worker more money doesn’t address the underlying reasons behind their decision to leave the dealership.
 
While salary is an important part of any employment relationship, it isn’t everything. There could be a range of other factors which have contributed to their decision to leave, which if left unaddressed will continue to be a point of frustration for the worker.
counteroffer | Teamrecruit
The employee may initially find the prospect of a counteroffer very flattering and appealing; after all, they can earn more money while staying in a job they know inside out and are very comfortable with. However, it’s likely the shine will have worn off after a couple of months when the same old issues resurface. After 3 to 6 months, there’s a good chance they’ll start looking for work elsewhere again.
 
Furthermore, the relationship you have with that employee is unlikely to be the same going forward.
 
Trust has been jeopardised, and there’s a good chance that both parties could end up feeling resentful. The employer may expect more in return from the worker in lieu of the additional money they’re paying them, while the employee may still be feeling dissatisfied with certain aspects of their role or working conditions.

When could it be worthwhile making a counteroffer?

In some situations, it might make sense to make a counteroffer.
 
One scenario is if you’re viewing it as a short-term solution and simply trying to buy yourself some more time. You may not be able to train a new employee up fast enough, or it could be difficult to find other workers with the required skill set and you need a little more time to work out how you’re going to fill the role.
 
It is however important to consider this strategy from the perspective of the employee, as they may end up turning down a great opportunity only to find themselves being managed out of the business in the not-too-distant future.
 
The other scenario where counteroffers can prove to be valuable is when they are combined with genuine consultation and real change.
 
It’s important to find out what other factors contributed to the employee’s decision to start looking for other work. It could be dissatisfaction with aspects of the role, feeling like they’re unable to fully utilise their skills, a lack of opportunity for progression, inflexible working arrangements, not feeling valued, a desire for a new challenge, a broader cultural issue within the dealership, or a combination of several of these.
 
Invest the time to really understand the employee’s concerns, develop a plan for how those issues will be addressed, ensure the employee is genuinely happy with the proposed arrangements, and make a commitment to see the plan through.
 
While it’s true that the statistics are stacked against you, if managed effectively, you may find you end up being one of the 1 in 10 cases where the employee does end up staying with you for more than 12 months.
 
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.

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