5 Reasons NOT to make a Counteroffer

So, there actually aren't any articles about this subject that I could find, so I just want to quickly address this issue from the COMPANY's perspective:

WHY YOU SHOULD NEVER OFFER AN EMPLOYEE A COUNTEROFFER:

Imagine you have an employee who comes in and says "I've decided to move to a different company. They've made me an offer, and I'm going to accept it."

Your initial response might be "WAIT! Is it the money? I can match it! What are they offering you?"

Your employee might, or might not, disclose that. You can definitely take the time to have a conversation with them, see if there are issues in your company that need to be addressed if something is lacking, but you should NEVER try and keep employees with money.

Here is why:

1: People don't stay for the money.

It's true what they say: People come for the money, stay for the people, and leave for the environment. If someone is giving you their 2 weeks notice, most of the time a counteroffer won't work. And even if they take your offer, studies show that they will likely leave you within 12 months anyway. All you've done is delay the inevitable.

2: It makes you look weak.

The worst-case scenario is, he or she might tell your other employees that you can be manipulated into giving them more by threats. Nothing is more damaging to your professional image than showing you can be forced into a corner by someone walking out the door.

3: It proves you're unfair.

If it's worth giving them a counteroffer today, it was worth giving them a raise last month. Making a counteroffer shows an admission that you underpay your employees.

4: It's more expensive in the long run.

As I mentioned yesterday, the majority of people who accept a counteroffer will quit within 12 months no matter what. The underlying issues causing them to make a change are still there. You are now paying Dave more than he deserves (if you've been paying him fairly) instead of filling the position with someone who WANTS to work for you for the same amount of money. Dave is already on his way out the door. You're just paying him more on his way out.

5: You miss out on the chance to improve.

If your employee is leaving, it's likely not about the money. You have an opportunity to fix an underlying problem at your company (which may be that you underpay your employees), and instead of addressing it, you want to put a bandaid on the problem. Take the time to figure out where you're deficient and why you're losing your people to your competitors.

There are my 5 reasons why employers should Never extend a counteroffer. The wording may sound strong. However, it is not my intention to insult, but rather to educate.