When employees decide to explore new career opportunities and submit their resignations, employers often respond with counter offers in an attempt to retain their valuable talent. It is estimated that 50% of employers make a counteroffer when an employee hands in their resignation, particularly in areas of the market where there is a skills shortage.

While counter offers may seem appealing at first glance, it is important for both employers and employees to be aware of the potential dangers they can pose.

In this article, we will delve into the risks and pitfalls associated with counter offers. Our aim is to help you navigate this delicate situation with caution and clarity.

1. A short-term solution

Counter offers are often made as a quick fix to keep employees who have expressed their intent to leave. But they typically provide only short-term relief. While a counteroffer may convince an employee to stay, underlying issues – or motivations that led them to consider leaving in the first place – may resurface, resulting in dissatisfaction and future turnover.

2. Erosion of trust

Accepting a counter offer can lead to a breakdown of trust between the employee and the employer. The employee may question why it took a resignation for their value to be recognised or wonder if their loyalty and dedication were truly valued beforehand. This erosion of trust can negatively impact the employee-employer relationship and create a sense of uncertainty and doubt.

3. Career progression stagnation

Counter-offers often focus on monetary incentives or promises of future career progression. Yet, often, these promises are not fulfilled. An employer’s motivation to invest in the employee’s growth or advancement may decrease once they have secured their continued presence within the organisation. This can result in a stagnant career trajectory for the employee.

4. Impact on cultural and team dynamics

Counter offers can disrupt the dynamics of teams and impact workplace culture. Other team members may perceive preferential treatment or feel demotivated if they see their colleagues receiving counter offers as a means of keeping them on board. This can lead to resentment, decreased morale, and a decline in overall team cohesion. They may also seek monetary incentives as well if they discover their team member received a monetary increase.

5. Reputational harm and constrained opportunities

Accepting a counter offer can have long-lasting consequences on an employee’s professional reputation and future job prospects. Other organisations may perceive the individual as unreliable, which could affect their chances of securing new opportunities down the line. Additionally, accepting a counter-offer may limit exposure to diverse experiences and hinder professional growth outside the current organisation.

Conclusion

While counter offers may appear enticing, it is crucial for both employers and employees to consider the potential risks they entail. From short-term solutions to the erosion of trust and stagnation in career progression, the dangers of counter offers are numerous.

Instead, organisations should focus on creating an engaging work environment, addressing employee concerns proactively, and building a culture that promotes and rewards loyalty and professional development.

Likewise, employees should carefully evaluate their motivations for leaving and weigh the long-term implications before accepting a counter offer. The money may motivate you, but will you be happy remaining where you are?

By recognising and understanding these risks, both employers and employees can make informed decisions that contribute to long-term success and career fulfillment.

Contact luvo’s Talent Team today if you’d like to find out more.