Negotiate with a Quitter?
Negotiate with a Quitter?
THE PROS AND CONS OF COUNTER-OFFERING RESIGNATIONS
Last month I wrote about the Big Resignation, sparked by an Harvard Business Review article, Preparing to Tell Your Boss, “I Quit” by Nihar Chhaya and Dorie Clark. Now I’m going to flip things and consider an employer’s point of view, and his or her options, on getting the news that a valued person the organization is jumping ship at a time when finding a replacement will be hard.
Imagine that you are in such a situation. Hearing the news, what would your first reaction be:
Sigh and wish the quitter good luck;
Shame them for their disloyalty; or
Swollow hard and try to woo them back?
Given today’s tight labor market, the third option may seem like the wisest response, but Mita Mallick, warns against it in her recent HBR article, The Downsides of Making a Counteroffer to Retain an Employee.
She says that it might be tempting to “counter with a promotion, a merit increase, a one-time bonus, equity grants, or an opportunity to move to another team.” Doing so may give the boss the feeling that they’re dodging the bullet of filling a vacancy, but that seeming solution may seed even bigger problems down the road.
Mallick explains that offering a promotion or a bump in salary may not really address the employee’s reason for bailing. Instead, it could be the workload, friction with colleagues, or the nature of the job. A handsome financial counteroffer may assuage the employee for a little while. But Mallick cautions that, “If they accept the counteroffer, it’s very likely they will resign again in the future. Research shows that 50% of candidates who accept a counteroffer are back in the marketplace looking again in two months.” And after six months, that percentage jumps to 80%.
Moreover, in the unlikely event that the person stays around for the long haul, right at the outset word would get around that he or she got a sweet deal by playing the “I quit” card. And other employees may resent you for caving in and some may try the gambit themselves.
Those are all valid points, though I’m not convinced that counter-offering is always wrong. It comes down to choosing the less bad alternative. Losing a key employee may be costly enough to justify running the risk of longer-term consequences.
Moreover, if the employer can delve into the person’s motivations, it may be possible to craft a counteroffer that addresses their interests in a way that others see as legitimate, and which does not create a bad precedent. Such conversations are difficult, of course. The key comes down to weighing both short and long-erm consequences, and not kicking the proverbial can down the road.
One last thought, switching back to the position of the person who is about to resign. Perhaps the current situation is so bad he or she should quit even without having another offer in hand. But I can imagine other cases where someone who has received a much better offer elsewhere, should consider whether there’s a chance that current employer might match or, better still, top it. If you’re in that situation, with a firm offer in hand, there’s little harm in seeing if you can do better by staying put.
That may be a longshot, of course, yet still worth exploring. If you do so, go into the conversation mindful of downside concerns that your boss may have and how you jointly might best address them.
Housekeeping
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Be well, Mike