Managing The Counter Offer

What do you do when an employee tells you s/he’s been offered more money to work elsewhere?  Below we discuss:

• 2 counter offer situations
• Why you should be cautious
• Before you make a counter offer
• Three things to remember about managing a counter offer

Where you Might Face the Counter Offer

We will talk about 2 situations where you as a manager might have to use a counter offer:

• When an employee has an offer from another company and you want to make the counter offer in an attempt to retain the employee
• When you negotiate salary with a new job candidate

Caution!

• It doesn’t make good business sense to overpay for a job
• Your other employees will be watching
• In the case of retention this rarely works anyway

Before You Make an Offer

• Assess the risk of not keeping the current employee or not landing the new candidate.  Who else is available? What other options do you have?
• You can only go so far with base pay.
• What’s the highest you’re able to go?  Gather information
• Consider internal equity
• Overpaying for a job
• Make sure they understand total rewards

• Consider alternatives:
• Retention bonus – this might at least buy you some time
• Signing bonus
• Alter the job
• Schedule flexibility
• Etc

• Determine why the employee is leaving.  You’ll likely need to fix more than salary to keep this person long-term.

3 things to Remember about Managing the Counter Offer

1. It’s not a paper exercise.  In both cases determine as much as you can verbally.

• Quicker
• Less stress
• Better employee relations

2. Know your limit … stay within it.
3. Get more creative with you employment offer.

Watch the ‘3-Minute Crash Course’ about Managing the Counter Offer (CLICK THE ARROW TO START THE VIDEO):

Looking for the Full-Length Podcast/Video? …

Get Instant Access to 200+ Cheat Sheets, Videos, and Other Immediately Usable Tools for Busy Managers – Try Out a Wily Manager Membership Today!