5 counter offer mistakes managers make

By November 14, 2017Management & HR, See all
Management & HR See all Manager making counter offer mistakes with an employee

This article is based on research for our recent podcast episode, What you need to know about making a counter offer.

Employee negotiation is always a challenge (especially if you don’t have a designated HR team!), but counter offers are a particularly tricky process. Because it’s not just about retaining top talent – it’s about ongoing team relationships, employee engagement, and your employer brand.

We recently sat down with Aimee Rieck, senior manager of human resources at Workopolis, for episode six of Safe for Work, the Workopolis podcast for employers (available on Soundcloud here and iTunes here). She offered up valuable advice on when to make a counter offer, calling an employee’s bluff, and much more.

She also mentioned the counter offer mistakes that managers make. Here are five of the big ones to avoid:

Mistake #1: Low balling

While you don’t want to start making wildly high offers to valuable employees to get them to stay (there’s only so much space in the budget, after all), you also don’t want to go too far in the opposite direction.

Let’s say, for example, an employee making $50,000 comes to you with an offer from another organization at $60,000.

“For the employer to come back and counter at $52,000 or $53,000, I don’t think you would expect that individual to stay within the team,” explains Rieck. “I think you need to do what’s reasonable, what’s in line with your salary scales, and what’s doable without overselling or over-committing.”

Mistake #2: Making it all about money

“I think money as a motivator only goes so far,” says Rieck.

“Today, candidates are looking more for that well-rounded offer. So not only the dollars and cents, but also the perks that come with the job. Some of the more intrinsic rewards like, is the work motivating? Do they gain value out of the work that they’re doing? Is it in line with their career path? And benefits as well – while it comes as a cost to employers, employees really value different types of benefit packages especially depending if someone is single or married with children there could be different types of benefits that would be more attractive to one individual over another. So, I think the full package is what employees are really looking for today.”

Mistake #3: Taking it personally

If an employee doesn’t accept your counter offer, you need to bow out gracefully and not burn any bridges.

“Being happy for individuals and letting them know that they were valued and wishing them well goes a long way,” says Rieck. “Because often times employees and employers do find themselves working together again down the road, even if it’s not for the same employer. They could have a working relationship together at some point in their career so I think it’s really good to always end things on a positive note.”

Mistake #4: Getting employees to accept, only to lose them a few months later

Experts warn that even when an employee accepts a counter offer, they end up leaving within six months anyway. How can you avoid this? Talking to your employee. A lot.

“I think that they should be having fluid conversations with the individual and really nailing down the reasons why they chose to go and interview and seek employment elsewhere. Are there things that they are currently not happy with in their current offer letter? Are there things that they’re not happy with within the organization, within their job, within their team?” says Rieck.

“Having a well-balanced, transparent conversation to get to the root of a lot of the issues that the employee may be experiencing can go a long way to make sure that this isn’t just a band-aid solution. You’re looking for longevity out of this employee. And if you’re willing to come back to the table and offer them more, and you are committing to them as an employer, that the employee is recommitting themselves to you.”

Mistake #5: Not keeping negotiations confidential (or as confidential as possible)

You hope that any negotiations with an employee remain confidential from start to finish – but things aren’t that easy. Employees talk. And when employees are talking about an individual’s counter offer, it can lead to resentment.

“If the information does leak back to the rest of the team and there become questions or conversations from other team members in terms of what somebody else was offered, the best thing you can do is shut it down as quickly as possible,” says Rieck.

“You need to quickly and respectfully shut down the conversations before you find yourself giving away too much information and then you have resentment from other team members – or you have a mass exodus from that team, which could also be detrimental.”

For more from Aimee Rieck, as well as insight from a recruiter, not to mention a recently-departed Workopolis employee (yes it was awkward), listen to the full episode of Safe for Work by tuning in on Soundcloud or iTunes, or watching it on YouTube below:

See also:
Common compensation conversation pitfalls (and how to avoid them)
How to teach managers to have tough pay conversations
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