After an employee resigns, you have one of two choices – counteroffer or let them go.
Normally, we would advise employers to let them go – but not before completing an exit interview to learn what led to their decision. The reasons for letting them go include: there is most likely some disgruntlement that underlies their decision to leave, questions about their long-term commitment, and setting precedents that other employees may follow to get a similar counter-offer.
However, in the candidate-driven employment market, employers need to think differently about counter offers. Some quick stats shed light on why counter-offers should be considered in this market.
- 85 percent of employed professionals worldwide are open to switching jobs, according to Jobvite’s 2018 Job Seeker Nation Study.
- The National unemployment rate is less than 4 percent and the average time to fill a position is 44 days, up from 23 days in 2014.
After reviewing these numbers, can you really afford to lose one of your top performing employees without putting up a fight? In today’s candidate drought, it becomes clear that a counteroffer might be your best solution.
For the remainder of this post, we will share a step by step outline of how to handle a key employee resignation. The actions you take and conversations you have immediately afterward are important to retaining your current employees and preventing future departures.
STEP 1 – MAINTAIN COMPOSURE
Let’s imagine one of your top employees comes to you today and tells you they’ve accepted an offer at another company.
And while you’re shocked and disappointed to hear that they want to leave, you also know you can’t afford to lose such a high-performing employee to another company. So how do you convince one of your best employees to stay at your company?
First, take a minute to gather your thoughts after the news. It’s never easy to hear that a critical member of your team feels the need to go elsewhere to find the opportunities they need at this time.
Once you’ve composed yourself, you can change the focus of the discussion from resignation to retention and learning.
STEP 2 – GAIN UNDERSTANDING
The best way to entice your employee to stay with your company is to find out why they’re leaving.
Without pressure, tell them that you want to learn more about what the other company provided that convinced them to leave. Was it for more money or a better company culture? Are they getting a new challenging position or an opportunity to advance their career?
Finding out this information early on is especially valuable since the majority of reasons why employees quit their job are under your control.
Also, make sure to ask them questions about what excites them about the new position and company. Do they offer special perks and benefits? Will they be working on an exciting new project?
Once you find out the answers to these questions, you should reevaluate your company and see if there are any changes you can make to your company culture, leadership, compensation, etc. If one employee is raising concerns about these issues, it’s likely that other employees feel the same way too.
STEP 3 – ASK IF IT WOULD BE OK EXPLORE RETENTION OPTIONS
After you have a better idea of why your employee wants to leave, explain to them that you may have some leeway to make adjustments if retention is an option. Then, ask them if they would be open to exploring the idea of staying at your company.
If they say yes, then repeat back your employee’s reasons for leaving and tell them you’d like 24 hours before you come back with a solution. Make sure to keep the timeline short. Your employee is on a clock to departure and they have a lot to consider in a short amount of time.
Most importantly, ask your employee to NOT share this conversation with any team members until you have had a chance to work things through. And be very clear that you’re going to explore some options but nothing is a guarantee. Do not commit to anything or promise a counteroffer.
4. PRESENT OPTIONS WHEN YOU SAID YOU WOULD
Once you’ve taken some time to think about possible solutions and ways to entice your employee to say, now you have to present your counteroffer. If you said you would come up with a solution in 24 hours, then stick to your timeline.
And remember, your counteroffer should address your employee’s specific needs. For example, if they felt like they were plateauing and not learning new skills, then offer them training and development opportunities. Some other ideas include a new role, compensation, or responsibilities.
While you may not be able to resolve every issue, you can work to come up with a compromise or solution that will work for both you and the candidate.
For example, if your sales rep is leaving for a better compensation package, then get creative with your own compensation structure. Research the latest salary trends and commission rates to make sure yours is competitive.
Keep in mind that your sales rep will be starting over with new clients and will have a substantial amount of ramp up time. Find ways to incentivize them with monthly bonuses or a higher commission rate. Show them how staying with your company will provide them with a greater earning potential today than if they left and started over with a new company.
When creating and presenting your new offer, you really need to pay attention to why your employee wanted to leave in the first place and work to address those concerns.
STEP 5 – THE OUTCOME
In the end, your counteroffer will either be accepted or rejected by your employee. And even if it doesn’t go your way, you have to remember that if you never asked your employee to stay, then there was a 100 percent chance they would leave.
Another positive you can take from the situation is that you gained good intelligence to help you head off future departures. Even though you may have lost one of your employees, you still have a team of people working for you. How do you prevent them from leaving?
Take what you learned and evaluate how your company operates, identify any gaps in your business, and really take a hard look at your employee engagement levels.
Do you need to adjust your team’s salaries? Is the company culture toxic or does it help people thrive? Are there any employees who seem disengaged at work?
Use these insights to make your company more appealing and prevent future turnovers.
Are you more inclined to counteroffer in a candidate drought? Why or why not?
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