Top 4 Ways To Manage a Counter Offer From an Employee

Author: Jennifer Drohan

Top 4 Ways To Manage a Counter Offer From an Employee

The frustration behind finding out one of your best employees has received an offer from another organization is a frustration many managers are facing today. There’s hardly any manager that wants to hear that someone on their team has another job offer in the works with a better package. The question is how should you respond to this news as a manager? Should you counteroffer or just accept that they’re moving on? Are they being honest or in some cases bluffing to get a raise, but how can you be sure?

The truth is, resignations are inevitable, and many of them don’t happen on a schedule that’s convenient. When this happens, which will be likely an impromptu event, here’s what you need to do to manage accepting a counter offer from an employee:

1. Stay calm and don’t react right away

This is easier said than done as these events usually catch managers off guard and losing a key employee can be frustrating. Take time between responding back to their news to get more information about the offer. Getting details such as the company, the role and of course total compensation package is going to be key to understand if this is an opportunity the organization is able to compete with. These types of conversations are always best either face to face or on video if the employee is remote or hybrid.

2. Verbalize obvious bluffs

It’s not uncommon for employees to try getting a raise by stating they have a counteroffer. You can tell if the offer is legitimate by asking them questions around the 3 T’s which are:

  • Task (what they will do in their new role)
  • Team (The team or department they will be working with)
  • Technique (skills and training they will use to get upskilled on) 

By asking the above questions and looking at their body language they’ll show genuine excitement if it’s real. If you are not getting those types of signals, be honest and share that you may believe they are using this opportunity or narrative to get more money in their current role.

3. Examine the employee’s value and act appropriately

After getting information about the counteroffer, your following action really depends on how badly you’d like to retain the employee. If it’s not a valuable employee, the right response is just to be grateful for the time spent together, wish them well and start planning their exit. If it’s a star employee, try to understand how the new opportunity compares to what you offer and how staying will benefit them through training and development, salary increase, or promotion. You’ll need to work on making staying look appealing. Be careful of making an immediate counteroffer as this can backfire, giving the impression that you’ve been holding out. This might only be necessary if their departure would cause huge problems.

4. Avoid the next exit

On a brighter note, the competitive intelligence you get from an employee getting a counteroffer is a benefit. Having good knowledge of what other companies are offering and why people leave will improve your retention efforts. Employees often only find out how valued they are in the exit interview, so it’ll help to keep track of valuable employees in terms of skills and potential. Check-in with them regularly to ensure there are no exit risks.

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