When and when not to counter-offer

A key member of staff has been offered a new job however do you offer a counter-offer or prepare for life without them? The main reason to counter-offer an employee is if they are considered ‘business critical’.  If you organisation does not have a member of staff who can directly replace the leaver then you need to consider offering a counter-offer. 

When you should counter-offer

You should only counter-offer when the employee is ‘business critical’ and projects rely upon their set of skills. A counter-offer should also be considered when there is not an employee internally who could inherit their responsibilities. 

When you shouldn’t counter-offer

If the employee is not ‘business critical’ then you should consider talking with the employee rather than offering a counter-offer. Explaining they are valued can sometimes be enough to convince them to stay. You shouldn’t provide a counter-offer if there is an employee internally who is capable of instantly inheriting the responsibilities.

The job market can also be an important factor when deciding to counter-offer or not. If there is a surplus of potential candidates with similar skills who can be easily trained then it may be more cost effective to hire someone new, although costs of training a new candidate also need to be taken into account.

Things to include in the counter offer​

• Salary: The main reason for employees leaving is for an increase in salary. Offering a salary match is usually enough to convince an employee to stay. 
• Working conditions: Remind the employee of the working conditions you provide. Also mention how the environment is a familiar environment where they are well respected and fit into the team. 
• New project: Finally, you could provide the employee with a new challenging project. This may provide them with the chance to learn new concepts or expand their knowledge. 
• Benefits: Benefits are also a good bargaining chip. If you can't afford to offer a large salary increase a small increase with extra days paid holiday could help convince your employee to stay
• Work from home: If an employee is leaving your company to work closer to home you could try offering them the chance to work from home a few days a week. The cut in commuting time will help them balance their social life more easily.

Deciding whether to counter or not can be a tough decision regardless of the employee who has been offered a new role. You should explore the current jobs market and think about the effect it will have on the team were you to not counter. However the additional expenditure you may have by providing a counter offer could be more cost effective than acquiring a new talent.