When an employee reveals their intention to quit in favor of a better job at a different organization, it’s not unusual for an employer to try to persuade them to stay by offering them a higher salary. Indeed, such counteroffers are so commonplace that unhappy employees will occasionally solicit outside job offers just to pressure their current employer into giving them a raise. Yet new research from the global staffing firm Robert Half finds that while most US employers make counteroffers to departing employees at least some of the time, they usually fail to retain these employees for the long term.
In an online survey of over 5,500 senior managers in a variety of professional fields across the US, 58 percent said “yes” when asked whether they ever extend counteroffers to employees to keep them from leaving for another job. However, when asked how long employees who accept counteroffers typically remain with the company, the mean response was 1.7 years:
“Counteroffers are typically a knee-jerk reaction to broader staffing issues,” said Paul McDonald, senior executive director for Robert Half. “While they may seem like a quick fix for employers, the solution is often temporary. When employees accept a counteroffer, they will likely quit soon afterward.
Professionals should avoid these offers, McDonald advised. “Money doesn’t solve everything. If you accept a counteroffer, your employer may question your loyalty to the company. And, more importantly, the root causes of why you were looking to leave in the first place may still exist.”
The staffing firm cautions both employers and employees against counteroffers for several reasons, noting that they can cause morale to suffer by sending “the message that threats of leaving are a means of climbing the ladder, rather than outstanding performance and dedication.” An employee retained with a counteroffer will often be distrusted for the remainder of their tenure with the organization, while their performance is unlikely to improve, knowing that the firm was willing to spend money just to keep them around a little longer.
The clearly superior alternative to counteroffers is to proactively identify employees at risk of quitting and give them reasons to stay before they go out looking for a job somewhere else. According to our research at CEB, now Gartner, this means creating compelling career paths for employees, including ample opportunities for learning and professional growth, so they can see a long-term future for themselves as part of your organization.
Last week, we talked about the impact the end-of-year holiday season has on productivity as many employees slow down at work in the weeks leading up to the holidays. Perhaps even more startling, though, is what happens to employee engagement afterwards: Our recent career pathing research at CEB shows that gatherings among family and friends around the holidays can lead to a 2 percent decline in career satisfaction and a 16 percent spike in job search activity. It’s one reason why the first week of January tends to be the most popular time of year to look for a new job. (CEB HR Leadership Council for members can read more about the effect of holiday gatherings and other “career risk triggers” here.)
To address the end-of-year slump, employers can try using the final weeks of the year as a time to deliver on other aspects of the employee value proposition. If your company can afford it, use the “lighter mood” of the holiday season for team-building exercises or charity activities.
It might be too late for some organizations to rescue their employees from the grips of this special Christmas brand of idleness at work, but there are some things you can do in the New Year to make sure to keep engagement levels high year-round, and to combat all of the potential career triggers that pop up throughout the year for your employees (like birthdays, work anniversaries, or high school reunions):
- Encourage ongoing performance conversations, which will allow managers to formally reconnect with employees and assess job performance and alignment.
- Curate a workforce of engaged high-performers by emphasizing enterprise contribution.
- Train your managers to have development conversations at the right times to avoid the dangers of other career risk triggers.
Fast Company’s Jared Lindzon interviews Oregon State University business professor Anthony Klotz, whose new paper delves into the dynamics of how employees quit their jobs and the impact it has on their employers:
In his initial studies Klotz found that there were seven common ways in which people resign, listed in order of their frequency:
- By the book (31%). These resignations involve a face-to-face meeting with one’s manager to announce the resignation, a standard notice period, and an explanation of the reason for quitting.
- Perfunctory (23.5%). These resignations are similar to “by the book” resignations, except the meeting tends to be shorter and the reason for quitting is not provided.
- Avoidant (12.7%). This occurs when employees let other employees such as peers, mentors, or human resources representatives know that they plan to leave rather than giving notice to their immediate boss.
- Grateful goodbye (10%). Employees express gratitude toward their employer and often offer to help with the transition period.
- Bridge burning (8.6%). In this resignation style, employees seek to harm the organization or its members on their way out the door, often with verbal assaults.
- In the loop (7.9%). In these resignations, employees typically confide in their manager that they are contemplating quitting, or are looking for another job, before formally resigning.
- Impulsive quitting (6.3%). Some employees simply walk off the job, never to return or communicate with their employer again. This can leave the organization in quite a lurch, given it is the only style in which no notice is provided.