by Katherine Spencer Lee
With unemployment exceptionally low and an ample number of job opportunities, one of the most challenging problems an information technology (IT) manager faces is locating and retaining the best possible group of employees. An increasing number of IT departments are realizing that continuity is a vital link in building a productive and profitable workplace. In this economic environment, though, it's not easy to determine your next move when one of your team's most valued employees tells you that he or she has received a job offer - with higher pay - from another company.
Today, many technology professionals receive counteroffers from their current employers as soon as they announce that they are considering leaving. In fact, in a number of instances, employees pursue new opportunities for precisely this reason - that is, as a means of adding leverage to their demands for a promotion or raise. In these cases, the individual often has no intention of leaving his or her current place of employment.
As a manager, your first response may be to make a counteroffer. You might think, for example, that you can't afford to lose this person when you already have several openings you're trying to fill within your department. Or, the IT department could be in a period of flux, requiring the stability of a longstanding, competent professional. Or, you may still be feeling the effects brought on by the departure of another member of the team - and just getting acclimated to the work style of his or her replacement. Most of all, you might be concerned about the effects of this departure on your department's morale - or even your own reputation as a manager.
In your eagerness to retain this employee, you will be tempted to make a counteroffer. But before you do this, keep in mind that counteroffers are risky, and in some instances they can actually backfire. A recent research study commissioned by our firm reveals that corporate executives are mixed about counteroffers. According to the survey, 56 percent of executives said they would likely use counteroffers to persuade good employees to stay, while a significant 42 percent would refrain from taking this measure. Regardless, counteroffers must be considered as a viable retention option. Several key factors to assess are:
- The employee's state of mind. The fact that an employee is looking for a new position in the first place suggests that he or she is probably unsatisfied with more than one aspect of the job. It could be his or her relationships with other staff. It might also be a belief that growth opportunities within the department or firm are limited, or even broader concerns about your organization's culture. If you're unable to make the long-term changes the employee is seeking, you may end up with a "short-timer" no matter how hard you attempt to keep him or her on your team.
- Financial factors. Although money is rarely the primary reason behind a job change, it's still an important factor when a new job offer is being evaluated by a candidate. If it turns out that the other company is offering a good deal more money to your employee, think carefully. Trying to match or exceed the compensation package could risk upsetting your organization's salary structure. If other employees hear of the counteroffer, the wheels may start turning. In short order, you could have your entire department questioning its compensation and job responsibilities.
- The impact on morale. In some cases, employees who accept your counteroffer will be working under a cloud of doubt. They'll perceive - rightly or wrongly - that management is unsure of their loyalty. As a result, the bonds of credibility that ensure productive interactions between managers, employees and their peers may be severely challenged.
A Careful Reality Check
Given all of these potential risks, it's important that you evaluate the situation carefully before making a counteroffer. Assess whether the issues that led the individual to pursue other opportunities can and should be addressed and resolved. Sometimes matters as simple as poor or infrequent communication, or inadvertent misunderstandings, can lead employees to believe it is necessary to change their job situation. And in some instances, the news that a staff member is looking for a job elsewhere can often be a wakeup call that there are indeed problems within a department or company that should be more rigorously reviewed.
Talk with other managers at your firm to find out if there may be a broader pattern revealed by recent employee turnover. Have other staff members who have decided to leave the company cited similar concerns? If so, is there an organizational means of resolving the problem in order to prevent further turnover?
At the same time, you must determine whether this particular professional is truly a valued, contributing member of your team. Just how significant an impact will his or her departure have on your department and company? Does he or she possess knowledge or skills that would be particularly difficult to replace by making another hire? How long would it really take to get a new employee up to speed? Step back from the situation and evaluate whether the individual's past performance warrants the additional compensation and any special changes you may have to make as part of the counteroffer, such as a change in title, a new office or additional vacation time.
The Final Choice
Counteroffers can present a variety of challenges and problems, so make sure you look at each situation cautiously.
Should you decide to let the employee pursue another job, take time to conduct an exit interview so you can learn more about ways you might prevent additional staff from leaving in the future. And remember that while you may be losing a valued and productive employee, you also now have the opportunity to fully reassess the position, and restructure its role and responsibilities before you fill it again.
