If one of your best employees gets an offer somewhere else, it’s natural to try and convince them to stay.
Many employers offer a higher salary in hopes of keeping their top talent — a recent study by Robert Half reported that 58% of managers have made counteroffers to employees wanting to leave the company.
Besides losing a good worker, many employers don’t want to hurt employee morale or go through the lengthy hiring process to replace the departing employee. Making a counteroffer seems to be the best, if not only, option.
But the study found this solution is only temporary, and these employees end up leaving anyway.
Money can’t fix everything
In the study, 5,500 hiring decision-makers were polled, and, on average, their employees who accepted counteroffers only stayed 1.7 more years.
Why is this? Money often isn’t the reason employees decide to leave their companies.
Research by Ladders, a job board specializing in six-figure positions, seems to confirm that throwing money at retention problems isn’t the answer. In fact, only 30% of employees surveyed said that money was their reason for wanting to leave.
Here are some more employee insights from the research:
- 94% would take their dream job right away if it came up
- 31% would take a pay cut for that dream job
- 67% would make an immediate job switch, even if it wasn’t their ideal one, and
- 23% would take a title bump over a raise.
A different solution
Paul McDonald, the senior executive director of Robert Half, tells employers not to make counteroffers (and employees not to accept them). From the company’s perspective, it’s a quick fix that won’t last. On the employee side of things, accepting a counteroffer can make them appear disloyal, and it’s likely the original issue making them want to leave still exists.
Instead, employers can conduct stay interviews to get a sense of who isn’t happy and why. These interviews can establish trust between managers and employees, which could help identify problem areas in the company before they become deal breakers.