To Counter or Not to Counter

employees-talking-outside“I need to put in my two-week notice.”

That short sentence can evoke so many emotions. When an average or struggling employee utters those words, it may feel like a relief. But when a high performer delivers the same message, as a leader, your brain may go into overdrive. What happened? How did I miss the signs that the employee was unhappy? Did I do something wrong? How long has he/she been interviewing? Why didn’t I know? What will we do without him/her?

We can all say “it’s business, not personal” but that doesn’t mean a resignation won’t hurt. Receiving news that an employee has chosen to leave feels like a breakup—or even a divorce. Just because the employee has made a decision doesn’t mean you’re ready to accept the news. You have a very important choice to make. Do you counter offer or not?

Counter offers are tricky. Before you make a counter offer, it’s important to truly understand why an employee wants to leave. Throwing money at a non-financial problem rarely solves it. You have to understand the real reason for the resignation in order to make meaningful change and an attractive counter offer. You may or may not be able to resolve all of their concerns. For example, you can’t make a commute shorter, but you may be able to provide a flexible schedule or optional telecommuting. You may not be able to change a challenging corporate culture, but you might be able to assign the employee to unique, independent projects.

But before you start digging into the reason an employee wants to leave, ask yourself this—if the employee didn’t trust you enough to discuss the problems BEFORE they had an exit plan, why would he/she feel comfortable doing so now?

If your employee wanted to leave, spent time looking for an alternative employer, took time off to interview, negotiated a compensation package, and gathered the courage to give notice, then they have mentally disengaged from your team long before today. From the day they interviewed with their possible future employer, they started envisioning their future there. Money alone will not erase the idealistic mental image they’ve created.

But the counter offer itself isn’t the most challenging part of the whole ordeal. It’s the aftermath that matters the most.

Let’s say you have been able to identify the root of the problem, and miraculously, HR has approved your enticing counter offer. Will you ever be able to look at your employee the same way again? The next time they call in sick, will you wonder if they’re interviewing? Each time they add a new LinkedIn connection, will you wonder why they’re building their network? In most cases, the relationship is permanently altered after a counter offer. That’s clearly true for the average employee who accepts a counter offer and then leaves the company within 6 months.

And the ripple effect of problems can extend past the manager/employee relationship. If the counter offer is accepted, other team members will certainly have an opinion and feelings about the subject. They’ll wonder why their loyalty hasn’t been rewarded with the shiny benefits of the counter offer, but their defector of a teammate was. They may even feel like the only way they could improve their employment situation is to threaten to leave themselves.

Resignations are contagious. One counter offer can set expectations among the entire team. Before you extend a counter offer to one superstar employee, be sure to consider the long-term effects on everyone involved.