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Greener Grass!? Counter Offer!? -How Will You Be Impacted?

Written by: Robin Throckmorton

Article Overview: Counter Offer attacks of the Labor War.

Greener Grass!? Counter Offer!? -How Will You Be Impacted?

With unemployment rates soaring (7.2% in Ohio as of June per state Department of Job and Family Services), why would an employer feel pressured to worry about workers seeking employment elsewhere? Possibly due to the fact that statistics are saying that we are in a talent war with a shortage of "skilled" workers of somewhere between 7 - 10 million by 2010. It doesn't take a mathematician to figure out the only way these numbers add up is because many organizations are struggling to find individuals with the right skills to fit their needs. But when they do, it will be a talent war!!! Not until an employee has been convinced of how much greener the grass is on the side of another organization, does their current employer begin an impulsive counter offer attack, that maybe just a little too late…The counter offer is best described by Edward Koller in "The Counter-offer Crisis":

"The counter offer pitch is the result of poorly organized management attempting
to play catch-up ball in the final innings of a badly played game."

Unfortunately, many of the counter offers that we've seen recently have been made in pure desperation. The employee has actually come to the employer to give notice and said, "Please do NOT make me a counter offer. I'm not interested." But, a counter offer is still presented in absurd amounts ranging from 10% to over 30% increases in salary. What message is being sent? "You mean a lot to us AND we should have given you this raise a long time ago!" Or, how about the employer that lectured the employee about the non-compete, intellectual property, etc. in one room and in the next the manager made them a counter offer. Hmmm…

Don't get us wrong, under certain circumstances; a counter offer may be the right solution. However, the way that counter offers have been played out recently, we'd say there are several big problems:

1. If the employee accepts the counter offer, they have now seen the green pastures on the other side of the fence; so how much longer will they actually stay with their current employer? What are you going to do to ensure they feel valued for the long-haul, in addition to the money that was thrown at them? According to Edward Koller "90 percent of the people in magazine publishing who accept a counter-offer from their employers won't be with that company one year from that date."

2. What if the employee doesn't accept? Why did the employer wait so long to let the employee know their value to the organization, which resulted in the employee's decision to go elsewhere?

3. What happens to the morale of those employees that remain with the organization in either case? If others find out that significant counter offers are presented to those employees attempting to resign, what is being done for those that don't attempt to leave? Do they have to submit their resignation in order to get a raise? Are they going to get stuck with double work if the counter offer doesn't entice the employee to stay?

During our last recession, too many employers took the attitude with employees that they were lucky to have a job. In this recession, we are faced with the combination of unemployment as well as a talent shortage. Rather than waiting until your key talent to resigns and then scramble to make a counter offer, it's time to take a closer look at your staff and determine which individuals possess the skills that would be difficult to replace, followed by proactively developing a plan to retain them.

What should you do?

1. Identify the individuals to be retained
These individuals may have specific skills that are unique to your business or they may be
individuals with a good business sense that can be an overall contributor within any area of
your business. Bottom line - these are the people you can't afford to lose today or tomorrow.

2. Communicate openly
This doesn't mean you are giving them an employment contract but let them know that they are
seen as a valuable component that you plan to keep around as an integral part of the
organization. Continue the open communication as often as feasible so there are never
surprises for either of you.

3. Set Expectations
Although this is common sense, often we don't do it. Set very clear goals and expectations
with your key contributors so they know what you expect of them to help you and the
organization succeed. This opens communication and helps them see how their individual
contributions are directly impacting the organization. But, make sure they know YOU see it as
well with feedback and recognition for it (see # 5).

4. Pay adjustments
What pay increases would you make if you were going to lose these key contributors tomorrow?
Why would you wait until you were going to lose them? Show them how valuable they are to you
NOW! You can tie it to the business results or the expectations you set but don't save it
until they are going to leave you.

5. Recognition and Rewards
Do you have a formal recognition and rewards program? Formally or informally, these key
contributors and any other A players should know they are successful even at the expense of
losing a B or C player. If the same top players are getting recognized and rewarded it may
motivate the others to do better or leave. You don't want to demotivate your top players by
not recognizing them do you?
Will this work every time? No! But, will it help most of the time? Yes… And, it isn't too late to start!

If you do have an individual come to you to resign, remember, they are your next public relations outreach. How you handle their termination will determine your next hire, next client, and so on. Do you treat them with dignity and respect or as a criminal? Talk to them. Find out why they are leaving and what you can learn from their decision. Find out what transition would work best for you and for them. Do they really need to be escorted to their desk and out of the building in "handcuffs" within 5 minutes of their notice to you? Would you ever want them to work for you again in the future?

The key to successful talent management is to be strategic, creative, flexible, and open minded.

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Article Tags: Counter Offer, greener grass, Labor War, Offer, talent war



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