Australian businesses are exploring new ways of operating to be more successful in the face of constant change. Unsurprisingly employees are also exploring what this means from a career perspective.
Companies recognise the role talent plays in driving success and the importance of retaining them. But it’s also important to recognise that when an employee has made the decision to leave, making a counter offer is not always the best approach. Making a counter offer can be counterproductive.
The truth about why good talent leaves
Employees make decisions to leave for all kinds of reasons. Increasingly it has less to do with salary and more to do with opportunity for advancement, mentoring, up-skilling, and a better alignment on values.
If you have your ear to the ground and are in a healthy dialogue with your employees, then ‘surprise’ resignations should be few and far between.
More than this, it’s about having the measures in place to ensure employees remain engaged and motivated. Every good employee wants more from their role. It’s about habitually asking employees what more you can do to keep them invested, rather than waiting until you’re faced with a counter offer situation.
If you are seeing more than your fair share of turnover, you should be asking yourself why?
Resignations can highlight a failure to recognise issues within a team, a lack of confidence in leadership, a disconnect between what is promised and delivered, or too few opportunities for growth and development.
But also, not every business is right for taking people on a career journey. Some businesses are great platforms for bringing in people who for a time will add value, and quid pro quo, that business will add value to that employee. Ironically, getting them to a level where they outgrow the role, and your organisation. It may be time to ‘fly the coup’, but there’s no need for sour grapes if you understand this from the outset.
Attempting to buy back talent
Understanding why an employee wants to leave is the first critical step to understanding if it’s worth making a counteroffer. Will asking them to stay work out?
In 70 percent of cases of senior retail candidates who are offered another role, their current employers attempt to ‘buy them back’. More so when their roles are difficult to fill, or where institutional knowledge is greatest.
In only 20 per cent of those cases does the counter offer work. But for how long? Within three to six months, at least half of all candidates who accept the counter offer regret their choice to stay.
Once an employee decides to explore their options, something fundamentally shifts in their mind. So when the ‘buzz’ of the counter offer wears off, whether it’s a raise, new title, new role, or a new boss, so too does the renewed enthusiasm.
Employers should know this consider their own talent options following a counter offer scenario.
Back to basics
Rather than automatically going down the path of making a counteroffer, it’s worth going back to basics:
Look internally for talent. Not only does this provide an opportunity for fresh talent, but it can also loosen talent bottlenecks common among larger organisations. Succession planning also returns to the agenda and in many cases highlights gaps in the approach to talent management.
Rethink talent and structures. Resignations present opportunities to rethink organisational structures: Initially to alleviate the short-term disruption of a valuable employee leaving, and then to more holistically assess longer-term growth strategies.
Bring in new blood. Talent loss can provide a needed headcount reduction. It can also help weigh up the investment in new talent against potential returns from an injection of talent as a catalyst for change and growth.
Being prepared for action rather than reaction
Managing talent is about being prepared for the unexpected in a constantly changing market. It’s about having your finger on the pulse, ensuring your HR and operations teams are across key talent areas. It’s also about creating a dialogue with talent in the market so that when faced with resignations, a knee-jerk counteroffer isn’t the first reaction.
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