Why key employees should resist taking the counteroffer when resigning

When one of a company’s key employees gets an offer to work elsewhere, it often creates chaos for their current employer.

“Key employees are considered irreplaceable,” says Dale M. Chorba, President of Action Management Services, LLC. “When someone who’s been with a company for many, many years gives their resignation, it can trigger a desperate response by the company’s management that can be difficult for some candidates to navigate.”

After delivering the news, some employers will offer to promote the person, raise their salary, or make emotional appeals to entice them to stay. But despite the counteroffer, Chorba says if it takes a resignation to get a promotion, it’s the wrong organization to work for.

Smart Business spoke with Chorba about how to handle counteroffers after announcing an intention to leave a company for another position.

Why are some key employees considering other positions?

Many companies are struggling to find the right candidate for their open positions, so they’re reaching out to those who are currently working in similar positions. Though these individuals aren’t actively searching for a new job, they’re often willing to listen to outside offers.

Those who progress through the interview process and are made an offer are then faced with having to tell their current employer that they’re leaving for another position — one that pays more, offers a better working arrangement as well as greater responsibility. The employee then must go back to their employer to hand in their resignation. That’s when the current employer often bends over backwards to try to keep the employee on staff.

How are employers responding to these resignations?

It costs a lot of money, time and training to replace key employees, especially those who have been on staff for a long time. Employers will attempt to make an emotional appeal to the candidate to try to get them to stay, sharing positive memories of their time together. That can lead some key employees to reconsider their decision. This is also a time when the employer is likely to make a counteroffer, a move that has skyrocketed since COVID, that would promise more money and a better title if the employee stays.

How should candidates deal with a counteroffer?

The employee in this situation should remember why they are taking the new opportunity. The current employer is likely to say a great deal about all they were going to do for the person, but they just haven’t had the chance. The employee should recognize that it shouldn’t take their resignation to get the changes they need to be happier in their position. Additionally, it’s a widely used statistic that 82 percent of those who take the counteroffer say, within six months, that they wish they would have pursued the new opportunity rather than stay. That’s likely because those who nearly resigned can be marked within an organization, finding themselves a victim of layoffs even if their performance is steady. It’s also possible that there’s no follow-through on many of the promises made to retain the key employee.

Candidates should recognize that the decision to leave is not always made alone. A spouse could be involved because the change to a new company could mean working fewer hours, a reduction in commute time and more. That makes it an emotional decision for the candidate as well because they know the move will have a positive benefit on their family.

Company cultures can also have an impact on the decision. Some candidates feel they’ll be a better fit in the new company culture than they are at their current place of employment. That can add another emotional layer to the situation.

Knowing what to expect when handing in a resignation can help candidates resist the appeals by the current employer to stay. It can be a difficult, emotionally charged situation, but it is most often not in the candidate’s best interest to take their employer’s counteroffer. It’s too little, too late, and whatever changes to the work arrangement that are offered tend not to materialize. Making a clean break is usually the better way to go. ●

INSIGHTS Recruiting is brought to you by Action Management Services, LLC

Dale M. Chorba



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