We’ve all been there, that high-performing member of the team walks into your office with a spring in their step. They hand over an envelope that feels more like a dagger to the torso. Yep, they’re offski and there’s nothing you can do about it. Or is there?
Your first instinct is panic, followed by a quick calculation: “What will it take to keep them?” The counteroffer seems like the obvious, immediate solution. It’s a quick fix to a painful problem.
But is it the right fix?
In most cases, the answer is a resounding no. While it may feel like a victory in the short term, making a counteroffer is often just delaying the inevitable. It’s a reactive patch on a much deeper problem, and it can create more issues than it solves.
Money is Rarely the Real Reason
The first thing to understand is that compensation is often the vehicle for resignation, not the root cause. A rival offer gives an unhappy employee a tangible reason to leave, but their job search likely started for other reasons:
- Lack of growth opportunities
- A toxic or uninspiring culture
- Poor management or leadership
- Feeling undervalued or unappreciated.
Throwing more money at the problem doesn’t fix any of these underlying issues. If an employee felt disconnected from the company’s mission yesterday, a 10% salary bump won’t magically make them passionate about it tomorrow. You might keep them for another six months, but their original motivations for leaving will inevitably resurface.
The Trust Factor is Broken
A resignation is a fundamental breach of the employer-employee relationship. The employee has already mentally checked out and invested time and energy in securing a future elsewhere. Even if they accept your counteroffer, the dynamic has permanently shifted.
You may start to question their loyalty. Will they jump ship the next time a better offer comes along? They, in turn, may wonder if they need to threaten to quit every time they want a raise or promotion. This creates a transactional, distrustful environment that erodes team cohesion. Furthermore, what message does this send to the rest of your team? The lesson they learn is that the fastest way to get a significant pay rise is to hand in their notice. This sets a dangerous and costly precedent.
A Better Approach: Learn and Let Go 👋
Instead of making a counter offer, it’s far more productive to treat the resignation as a valuable, albeit painful, learning opportunity.
- Conduct a Thorough Exit Interview: Dig deep to find the real reason they decided to look elsewhere. Ask about their manager, the team culture, and their career path. This is free consultancy—use it to fix problems for the employees who remain.
- Wish Them Well: End the relationship on a positive and professional note. This person is now part of your corporate alumni network. They could become a future client, a boomerang employee, or a source for referrals. Don’t burn the bridge.
- Focus on Retention: Reinvest the money and energy you would have spent on a counteroffer into your current team. Focus on building a culture where your best people don’t want to leave in the first place.
Ultimately, a counteroffer is a short-term strategy that overlooks the long-term well-being of your team and organization.1 The best way to deal with a star player’s resignation is to graciously let them go and then work tirelessly to create a place no one wants to leave.
Consider this: If an employee is mentally prepared to leave, is it a smart long-term decision to prolong their stay at your organisation? And would accepting a counteroffer signify a lack of loyalty?
The Stats:
- 57% Employers said it was somewhat common for employees to accept a counteroffer made.
- 28% of Employers believe an employee who accepts a counteroffer will be less loyal to the company.
- 21% are concerned that an employee’s concerns couldn’t be satisfactorily fulfilled.
- 39% of employers say the main reason to issue a counteroffer is to avoid losing an employee with valuable skills.
