“I’m moving on,” a key employee says, as they hand in their resignation.
It is highly likely that you do not want to lose the individual and that you do not have a back-up plan. You have a couple of immediate options and you need to move fast - Do you brief your trusted recruiter or search partner to start talent mapping or do you put your best offer forward to retain the talent?
Option two seems to make sense & in all honesty, you should do both. We all know the reasons why it is better culturally & commercially to retain your best employees, rather than constantly having to replace them. According to Investopedia it can take up to six months for a new employee to ‘break even’ and become a profitable member of your team.
Understanding all this, you produce a considered and compelling counteroffer.
But will it work?
It is not only about the salary
Money is not the only consideration for employees, however you are always best to review salaries and make increases where you can to ensure employees feel valued. Do you offer short-term incentives for agreed outcomes reached? Bonus payments are now relevant to most job types, not just revenue generating roles, and are great for retention.
According to HBR, nine out of ten people would be willing to be paid 23% less for a job that was more meaningful. With much of the workforce having tasted remote and flexible work during the pandemic, many are now looking for jobs that offer that same flexibility in the long run. Employees today are looking for challenging and rewarding work, a boss that supports & trust them, and a team culture that they can enjoy.
At FutureYou we recently conducted a LinkedIn Poll with a simple question: If you were offered a role at a new organisation and your current employer offered you a counteroffer, would you accept?
Having heard from 4000 respondents, the results were clear:
● 69% said “no, my decision would be made.”
● 13% said “yes, if the offer is matched.”
● 3% said “yes, for a 10% pay increase.”
● 15% said “yes, for a 20% pay increase.”
Counteroffers can come too late
For seven out of ten people, moving on from a job is not usually a decision driven by money. It is deeper than that. When an employee chooses to leave for what they deem to be greener pastures, it is not your responsibility to solely focus on their potential exit – it’s your responsibility to find out the reasons for their departure and to address them.
The truth? Counteroffers are often Band-Aids that cover a far larger problem. What’s more, they’re the cheap, off-brand type that don’t tend to stick. If your best workers are leaving, your focus should shift to why, and you should invest heavily in retention strategies.
From the outset your team are looking for purpose, for inspirational leadership, for work/life integration.
If you do lose someone, treat them well and they may come back! Most people have made a career move purely based on a high salary offer and regretted the decision, keep the door open…
How do you show your employee you value them? These five strategies are a great place to start:
- Have regular one-on-ones: By regularly chatting with each of your team members you create the opportunity to share ideas, download and learn. This is even more important if working remotely. Video catch ups enable you to add value through coaching, create a supportive environment and get to know people on a personal level.
- Recognition & celebrating success: Sometimes all a team member will be looking for is some recognition. Creating a platform and the opportunity for your team to recognise and reward each other authentically drives engagement and collaboration. Group rewards like massage vouchers are popular choices which focus on wellbeing.
- Offer flexible work arrangements: If you can always offer remote and flexible working arrangements, you should. Employees expect that the work can be done from anywhere, as long as the work is done. Don’t let your organisation become one of the few that goes back to rigidity. Manage people on outcomes and give them back some control of their own time.
- Define your company culture and invest in it: The most attractive company cultures are those that are part of the very DNA of an organisation. Define your culture, purpose & values. Invest time and money in bringing it to life. If employees align with common goals, it lays the foundation for loyal and dedicated teams.
- Be transparent: More than what you may already be giving in a 1:1. Wherever possible, you are best to share what is really going on rather than letting people speculate. Clarity and regular communication drives engagement and no question should go unasked, even if you can’t give the answers straight away.
If you need help in building an engaged, motivated and well-structured team, FutureYou is ready to help!