Countering: What To Consider Before An Employee Gets Another Offer

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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If you have any truly great employees on your staff, there will come a day when one of them comes in and tells you that she’s received a better offer. But that doesn’t mean you’ve already lost one of your stars. While an employee may be coming in with the intent to give notice, she’ll certainly listen to an offer to match whatever makes that new job so great.

That means the next move is yours and you may not have a lot of time to make it. You can ask for a little time to see if you can put together a decent counter-offer, but most of the time, your employees will want to be able to give notice and accept the new gig as soon as possible. You need to know what moves you’re willing to make before the topic ever comes up in discussion.

Do You Even Want to Make a Counter-Offer?

For many of us, the immediate reaction is definitely “yes” because of the expense and hassle of a change up. You’ll have to find a replacement and train him – and you may be shorthanded in the meanwhile.

But unless an employee really is something special, the price of keeping him may actually be too much. Hiring and training a new hire is a one-time expense while a raise gets more expensive over time. Worse, an employee that has gotten a counter-offer once may use an on-going job hunt as a way to guarantee regular salary increases down the line.

Weigh the actual costs – in advance – and decide whether you’re comfortable replacing a given employee or if you’d really prefer to keep her on.

Find Out Why Your Employee Went Looking

The reason one of your employees has a new job offer in hand may not be because of the money. If it’s even partly due to the work environment or a personality conflict or perceptions of company health, a raise or better benefits isn’t going to satisfy most workers for long. You may discover issues that need to be overcome to keep the rest of your staff satisfied. Those solutions may not involve pay raises or enhanced benefits. They may even help your company propser in the long run.

There’s another reason to keep truly excellent counter-offers in reserve. If you offer raises to every employee who announces they intend to leave, you’ll build a reputation among your staff as a pushover. But if you only rarely make such moves, you will reinforce the value you place on the employees who really do stand out in your company.

Decide What Your Upper Limit Is

When you consider the cost of hiring a new employee to replace someone who is leaving, it becomes critical to determine exactly how far you’re willing to go to keep even the best employees around. Putting a dollar amount in writing long before it becomes a question means that you’ll be better equipped in a negotiation. And make no mistake: a counter-offer can be a situation that requires great negotiation skills.

When you have an upper limit in place, you have more certainty during negotiation, and you’ll be better equipped to recognize fair outcomes.

Everything Needs to Be In Writing

Once you know what move you want to make, it’s important to put it in writing.

If an employee comes to you and you need to make a counter-offer quickly, it may not seem necessary to write down what you have in mind. Just the same, ask for the fifteen minutes necessary to write up your thoughts. It doesn’t take much time and it will keep negotiations manageable and impress upon your employees that there is a policy in place.