Study: Counteroffers Do Not Convince Employees to Stay Long-Term
Posted: July 20, 2018
If one of your best employees gets an offer somewhere else, it is natural to try and convince them to stay.
Many employers offer a higher salary in hopes of keeping their top talent — a recent study by Robert Half reported that 58% of managers have made counteroffers to employees wanting to leave the company.
Besides losing a good worker, many employers do not want to hurt employee morale or go through the lengthy hiring process to replace the departing employee. Making a counteroffer seems to be the best, if not only, option.
But the study found this solution is only temporary, and these employees end up leaving anyway.
Money cannot fix everything
In the study, 5,500 hiring decision-makers were polled, and, on average, their employees who accepted counteroffers only stayed 1.7 more years.
Why is this? Money often is not the reason employees decide to leave their companies.
Research by Ladders, a job board specializing in six-figure positions, seems to confirm that throwing money at retention problems is not the answer. In fact, only 30% of employees surveyed said that money was their reason for wanting to leave.
Here are some more employee insights from the research:
- 94% would take their dream job right away if it came up
- 31% would take a pay cut for that dream job
- 67% would make an immediate job switch, even if it was not their ideal one, and
- 23% would take a title bump over a raise.
A different solution
Paul McDonald, the senior executive director of Robert Half, tells employers not to make counteroffers (and employees not to accept them). From the company's perspective, it is a quick fix that will not last. On the employee side of things, accepting a counteroffer can make them appear disloyal, and it is likely the original issue making them want to leave still exists.
Instead, employers can conduct stay interviews to get a sense of who is not happy and why. These interviews can establish trust between managers and employees, which could help identify problem areas in the company before they become deal breakers.
Posted In: Human Resources, General; Hiring/Recruiting
Want to know more? Read the full article by Rachel Mucha at HR Morning