Before You Make a Counteroffer: What Employers Should Consider

A valued employee has just resigned.

They have knowledge that will be difficult to replace, strong relationships with customers or colleagues and responsibilities that cannot easily be handed to someone else. Recruiting and training their replacement will take time and money.

The immediate response may be: “What will it take to keep you”?

A higher salary, new title or promise of greater responsibility may seem much easier than losing an experienced employee. And sometimes a counteroffer really can make sense.

But before making one, there are some harder questions worth asking.

Why Did They Start Looking?

Start with the reason the employee was prepared to leave.

If compensation is the primary issue and their salary has genuinely fallen behind the market, an adjustment may address the problem.

But compensation is not always what prompted someone to consider another opportunity.

Perhaps they see limited room for advancement. Their workload has become unsustainable. They want less travel, different responsibilities or greater flexibility. There may be concerns about management, organizational change or the future direction of the business.

Offering more money may make staying attractive in the short term without changing the reason they considered leaving in the first place.

There is also a difference between an employee who has been actively searching for another job and someone who was approached about an opportunity they had not been looking for. Understanding how the resignation came about can help you understand what a counteroffer would actually need to accomplish.

Just as employees should think carefully about whether they should accept a counteroffer, employers should understand what prompted the resignation before deciding how to respond.

Why Are You Prepared to Offer More Now?

A resignation can suddenly change how an organization looks at an employee’s value.

The cost and difficulty of replacing them become more visible. Their institutional knowledge, customer relationships and contribution to the team may become harder to take for granted.

If you are considering a significant salary increase, promotion or other change, ask why you are prepared to make that offer now.

Perhaps compensation has fallen behind the market. Maybe the employee’s responsibilities have grown considerably without their salary or title keeping pace. Those are legitimate issues that a counteroffer may help correct.

But they also raise a broader question: if the employee was worth the additional investment after resigning, was there something the organization should have recognized sooner?

What Are You Actually Trying to Protect?

Losing a strong employee is disruptive.

Work needs to be redistributed. Customers may need to be reassured. Recruitment takes time. Other employees may have to absorb additional responsibilities while a replacement is found and trained.

That makes it important to distinguish between wanting to retain the employee and wanting to avoid the disruption of replacing them.

If the primary motivation for a counteroffer is avoiding an inconvenient vacancy, it may solve an immediate operational problem without creating a sustainable reason for the employee to stay.

Ask what the organization wants the employment relationship to look like six months or a year from now, after the immediate pressure of the resignation has passed.

Can You Deliver What You Are Promising?

Counteroffers are not always about money.

An employer may offer a new title, promotion, reduced travel, different responsibilities, greater flexibility or a clearer path toward advancement.

Those promises need to work beyond the resignation conversation.

Can responsibilities realistically be redistributed? Does the proposed promotion make sense within the organizational structure? Can reduced travel actually be maintained? Is the advancement opportunity real, and is there a reasonable timeline attached to it?

Promises made in the urgency of trying to retain someone can create another problem if the organization later discovers it cannot deliver them.

There may also be implications for the rest of the team. A substantial raise or promotion following a resignation can raise questions about internal equity and how compensation and advancement decisions are made.

What Happens If They Accept?

Getting an employee to say yes to a counteroffer is not the same as resolving the situation.

The employee had reached a point where they were prepared to leave. The employer now knows that too.

That does not mean trust cannot be maintained or rebuilt. It does mean both sides need to be comfortable recommitting to the relationship.

If the underlying concern has genuinely been addressed and both parties want to move forward, staying may be the right decision.

If little has changed beyond compensation, however, the same issues may eventually resurface. Instead of recruiting for the position today, the organization may simply find itself recruiting for it several months from now.

A Resignation Is Useful Information

Whether the employee stays or leaves, a resignation can tell you something about your organization.

It may reveal that compensation has fallen behind the market. Perhaps workload has gradually become unreasonable, career progression is unclear or the structure of the role no longer reflects the work being done. Looking more closely at role design and how it affects retention can help identify whether the position itself needs to change.

A resignation may also highlight a succession-planning gap or show how heavily the organization has come to depend on one person’s knowledge and relationships.

Not every resignation indicates an organizational problem. People leave good employers for many reasons, including opportunities that simply offer something their current organization cannot.

Sometimes the right outcome is to let a valued employee pursue another opportunity while maintaining a positive relationship. Leaving on good terms can preserve that relationship, and as we explored in Back for Good: The Rise of Boomerang Employees in Agriculture and Beyond, a former employee may even return later with additional skills, experience and perspective.

Whether they eventually return or not, understanding why someone was willing to leave can help you identify issues worth addressing before they affect another employee.

Before You Make the Offer

A counteroffer does not have to be an automatic response to a resignation, nor does it have to be automatically ruled out.

Before deciding, ask:

• Why was the employee prepared to leave?
• Does the proposed counteroffer address that reason?
• Why are we prepared to make these changes now?
• Are we trying to retain this person or avoid the disruption of replacing them?
• Can we realistically deliver everything we are promising?
• What impact could the offer have on the rest of the team?
• If the employee accepts, what will actually be different six months from now?

Sometimes the answers will support making a counteroffer. Other times, they may show that the better decision is to accept the resignation, learn from it and begin looking for the right person to take the role forward.

The important thing is to make the decision based on what will work for the employee and the organization beyond the immediate pressure of the resignation.