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“Mike is a Geologist and is working for an international mining company. As a whole he enjoys his job, and the company that he works for, his main gripe however, is that he feels that he should be earning more money.

Frustrated with the situation, and unsure of how to deal with it, he takes the same step that numerous other disgruntled employees take every day, and updates his resume and starts job hunting. Because Mike is good at his job and has a skill that is in demand, it doesn’t take long for him to receive an attractive job offer. The money is good and far more in line with what he is wanting to earn. There are some negatives, mainly around the fact that the company is not as reputable as his current company, and his growth may be limited long term.Mike however is very focused on finding a position where he will be earning more money, and so he accepts the offer.

Secretly Mike is hoping that he may give his current company a “wake up call” and that they may decide they need to offer him more money in order to make him stay, as he knows that the company really needs his skill set. He has also always had a good relationship with the company. Keeping all of this in mind, he plucks up his courage and makes an appointment with his manager to let them know the bad news.

Mike is pleasantly surprised by his company’s reaction. His manager tells him he needs to talk to higher management and will come back to him later on in the day. Mike is called back into his manager’s office a few hours later and told that the company are very upset to hear that he wants to leave, that he is a great asset to the company and that they cannot afford to let him go. He is then offered not only a substantial increase but a promotion as well. Mike is delighted!! He happily accepts the counter offer and lets the other company know that he has changed his mind and will be staying where he is”.

It appears in Mike’s situation that everything seems to have a happy ending, but be warned, counter offers very rarely end well. Many companies nowadays have a zero tolerance attitude when it comes to employees looking for counter offers and playing companies up against each other when it comes to salary. When the employee hands in their resignation the vast majority of companies will on principle not put up a fight and try to compete with the salary that the prospective company is offering. It has also been proved that a very high percentage of employees who accept counter offers go on to change companies within a year or two regardless.

The reality is that counter offers generally leave all parties involved with a bad taste in their mouths. The employee is left feeling slightly resentful that they have had to go to the extremes of finding a new job and resign in order to get “paid their worth”, or to get the “recognition they deserve”. The employer on the other hand is left feeling they had a ”gun against their head” and lose trust in the employer, and can’t help but wonder if every time the individual is offered more money they are going to have to throw more money their way, in order to keep them on board. There is also a third big loser in the picture, who tends to be forgotten, and that is the company that has gone through the time consuming interviewing process and made the person the offer which has been accepted, only to be let down at the last moment, where they have to start the whole process over again. People also talk, and one can get a bad reputation in the industry over this type of thing.

The reality is that there are a number of employees who feel that their relationship was adversely affected with the company after accepting a counter offer. The employers take on the situation can be that they have found a short term cure for a long term problem. They realise that anybody on the lookout for a new job can probably also get offered more money, and the employer is left doubting the sincerity, commitment and motives of the employee. The bottom line is the trust is broken from all sides.

It seems as well, that when looking deeper into the reasons that people want to leave their jobs that even when they say it’s purely for financial reasons, in many instances if you dig a little deeper you will find that it goes a lot further than that, and may be for reasons such as that they do not really enjoy the culture of the company, or do not like their boss, amongst other reasons. Offering somebody in this position more money doesn’t really solve the real issues at hand, and often becomes a temporary quick fix.

There are instances where companies have granted substantial pay hikes, and sometimes these increases are justified and necessary, but this is generally only the case when the company looks into the individual’s salary and realizes that they are being paid below industry standards. There are cases as well where individuals are being underutilized or over worked and that changes are needed to be made to their current job description. Each case is unique, and there are times where counter offers are necessary and productive, but as a whole counter offers are not a good idea.

A good way for companies to avoid the damage to the relationship that a counter offer can make, is by having performance appraisals on a regular basis. That way companies have a catchment net where they can catch dissatisfied employees who are of value, and try to sort out any issues they may have, before they have slipped through the net and started job hunting. It gives them the opportunity, to do some damage control up front and avoid the situation where they have to start considering making counter offers.

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