Counter offers don’t work — 4 steps to take instead

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Counter offers don’t work — 4 steps to take instead

Counter offers don’t work because it’s never about the money. Take these two cases in point.

Case 1: Jim and Daniel

Jim walked into his manager’s office a few months ago and said, “I quit”. His manager, Daniel suspected this might happen. He talked to Jim regularly — not only about the job Jim was doing — but also about where Jim wanted to go in his career. Through these conversations Daniel also knew that Jim was being pursued by an old mentor to join him at his current company. In fact, Jim had been pursued by this man for about 18 months.

What finally persuaded Jim to walk into Daniel’s office that day was the offer of a 50% pay increase.

Jim’s skills are very rare. He is in a very technical role in a niche area of the construction industry. Jim was being paid well before the new offer and a 50% pay rise would have put him well over industry average.

Who would say no to an increase like that especially for the opportunity to work for someone you like, trust and respect?

Jim would — and did.

Daniel thought he knew what Jim wanted from his previous conversations so he sprang into action. He got the CEO involved, approved a new title and gave him access to the newly developed innovation lab at the company, where Jim got to be creative and test out some of his ideas.

Daniel and the CEO made it happen quickly and the CEO’s involvement added gravitas to their claim that they did not want to lose Jim, not only because replacing him would be tough, but because they truly valued what Jim brought to the table.

Jim stayed — at his current rate of pay — because it was never about money. It never is.

Case 2: Stephan and Rob

Stephan walked into his manager, Rob’s office a few months ago and said, “I quit”.

Stephan told Rob he was looking for ‘something different’. He’d been at this company for 3 years and wanted a ‘new challenge’. He was also offered a very nice pay increase.

Rob made Stephan a counter offer — Stephan refused — because it was never about the money. It never is.

Stephan’s exit interview revealed that, while he would have walked on hot coals for his old manager, Andrew — Stephan liked, but didn’t respect Rob, who had only been with the company for about 9 months.

Andrew had high expectations, but made Stephan feel like he and Andrew were “in it together”. He could talk to Andrew, he knew Andrew had his back.

Rob was a nice guy and had the right skills for the role. But he wasn’t the right culture fit. Rob had become dis-engaged, frustrated with the lack of resources his team had to help them do their jobs and he checked out (and in fact, gave notice shortly after Stephan).

Andrew would joke about this same lack of resources — and then work with Stephan to find solutions.

Working for Rob, Stephan felt like the job was, ‘wearing him down’. Yet the same job, working with Andrew was ‘a challenge’.

Stephan is a gun — a very high performing sales professional for an FMCG company. He is passionate, committed, smart and hard working. Everything any employer could want.

He is a regrettable loss — and one that could have been easily avoided. Rob was not a good hire and once on board, his manager did not keep her finger on the pulse to make sure Rob was settling in and that the team was not being disrupted with the change from Andrew to Rob. Andrew and Rob’s manager also approved 2 more head count — after both Andrew and Stephan gave notice.

Statistically, counter offers might bribe someone who has given notice into staying an additional 6 – 12 months, but rarely will a counter offer work long term.

The only truly effective way to keep someone on board who is threatening to leave is to address the underlying issues.

A pay increase from a new company may get their attention, but they have to be looking in the first place for them to notice.

Instead of making a counter offer follow these 3 steps when someone walks into your office to say, “I quit”:

  1. Make sure their salary is at or above current market rate. If it isn’t give them a pay rise to bring it to current market rate. This is not a counter offer, rather a salary recalibration.
  2. More importantly, talk to them to discover the source of their frustrations. What made them entertain other offers? If you can do something to alleviate those frustrations do it. It is HIGHLY likely that the cost of whatever they require to stay and be completely engaged will be less than the cost of finding their replacement — especially since this often eventually leads to meeting their requirements anyway.
  3. Have regular, ongoing discussions around the 8 ‘Currencies of Choice’ so that both the needs of the organization — and their own individual needs are met.
  4. Repeat steps 1 – 3 regularly.

Counter offers don’t work because it’s never about the money. If you follow the 4 steps above, you’ll rarely face a situation where you’d be tempted to make one.

Warm regards,



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