With the recent rise in unemployment rates across the U.S., there undoubtedly has been an expanded talent pool to hire from; however, many aren't the right fit for the open roles companies are hiring for. With very targeted hiring given the economic conditions, companies are being very particular in the talent they're recruiting, meaning it could be of your key players. That is why it's more important now for companies to focus on retaining top talent.
Imagine one of your top performers steps into your office. You’re surprised to hear them say they have another job offer on the table with a higher salary. Your first instinct may be to give a counter offer, but should you? Here are 4 questions to consider:
Is money all that matters?
Money may be only part of the reason an employee decided to look for another job.
While compensation is important, other issues like mismatched culture, potential for growth and commute usually prompt people to start looking. It’s essential to ask yourself if a raise will really keep the employee happy and engaged in the long run. Try to dig deeper and get to the root of why they want to leave. Ask probing questions like, “Why did you feel the need to look for another job?” “What is most appealing to you about this new role?” “Is there anything besides a salary increase that the new position offers?” After carefully listening to their concerns, you can evaluate whether a counter offer makes sense.
Is this a long-term solution?
If the employee accepts the counter offer, will they be as fulfilled, engaged and productive as they were before? Is their future still bright with the organization? According to Forbes, the average employee stays with their employer less than 12 months after accepting a counter offer. It may band-aid the situation, but in some instances, the fix is only temporary.
On the other hand, some employees excel after accepting counter offers. Consider factors like their tenure within the company, relationships in the organization and the quality of their work. If you feel this person is capable and passionate about the company mission, a counter offer may be the right move. It's essential to carefully evaluate every unique situation.
How will this affect your relationship?
Now that you know your employee may be leaving, think about how this will impact your relationship. Will you still be able to trust and depend on them like you did before? When counter offers are extended, “many managers begin to resent their former star employee,” according to Inc. This illustrates that while it may sound easier to entice this staff member stay, it can cause tension on the team.
However, if your relationship is strong, you can openly communicate and trust the employee, a counter offer may make sense. The important thing is to think about every potential outcome before you rush to a conclusion.
What is the market offering?
After listening to the employee, you may find that they love the company, the culture and the role, but money truly is their only concern. Evaluate what the market is offering and how your salaries line up. Conduct market research and analyze what the industry standards are. What is the competition offering in terms of pay and employee benefits? Does your business fall short? If so, it may be time to restructure salaries. If they aren’t competitive with what the market is offering, this employee may not be the first to gravitate towards another, higher paying position.
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