Should I Stay Or Should I Go?
Even though you already have a job, you’ve been interviewing with other companies and have now just been offered a position. This is the day you go to your supervisor or HR department and turn in your two weeks’ notice (you are a professional after all, you don’t just quit). But then, surprise, you get a counteroffer to stay.
While this still happens in approximately 20% of the largest U.S. markets, the stay-put counteroffer may be a dying trend in corporate America. In an article on Society for Human Resource Management’s website shrm.org titled, Stay-Put Counteroffers Can Backfire, CFOs Say, survey data shows that counteroffers can often have unintended consequences.
For one thing, when a counteroffer is extended and more money is offered, the chief financial officers (CFOs) in the survey indicated that this usually necessitates raises for other employees within that department. It can also affect annual budgets and make employees wonder if they need to quit in order to get a raise. Plus, if only the one employee accepts the counteroffer of more money while the remaining employees get nothing, it can harbor resentment within the department and make the team members question the loyalty of the person who stayed “just for the money.”
Furthermore, just offering more money to get an employee not to leave doesn’t address the root issue that made the person want to leave in the first place. Think about that. If an employee truly enjoyed his or her job, yet felt they were underpaid (grossly that is, I think everyone feels they’re underpaid to some degree), surely this employee would talk to their supervisor and ask for a raise rather than go through the effort of finding a new job that they may not like. Most likely, the employee doesn’t like several factors about their position. Plus, offering more money could reinforce the perception that they were always underpaid and, therefore, resent their supervisor and/or company even more.
There are better ways of improving employee retention, and if compensation is an issue within a particular market, it’s best that companies review this on a regular basis to stay competitive. Other issues at play could be excessive workload, lack of teamwork, bad management, no reward system, and little to no opportunity for advancement.
Obviously, companies need to improve employee retention -- especially when it comes to top talent -- but that doesn’t mean they can just throw money at people and expect them to stay. Based on the survey in the article, most CFOs have already figured this out.