Bramwith Consulting’s Saffa Ayub delves into the tricky topic of counter-offering to those employees who want to leave your function
It’s a nightmare scenario for any manager. One of your most highly-skilled team members comes to tell you they are leaving for a rival company.
They are mid-way through a project; they have been with the company several years – replacing them will be an expensive hassle. A 2014 report from Oxford Economics put the average expense of replacing an employee at £30,000, predominantly made up of lost productivity in time spent getting a new member of staff up to speed.
What do you do? Should you counter offer and try and persuade them to stay, or accept that if they really want to go you’re probably better off without them?
There are many statistics circling the internet on the perils of proposing a counter offer. One much-shared stat, purportedly from a Wall Street Journal (WSJ) article, states 93% of workers who accepted a counter offer were back on the job market within six months.
This sounds pretty conclusive but unfortunately is not based on any evidence that we can find – the survey is nowhere to be found on WSJ.
So, then what are the facts on counter offering procurement chiefs should take into account?
In the past year, approximately 87% of our senior candidates – those not relocating – and 43% of junior candidates received a counter offer. Less than 10% accepted the offer.
Of those who accepted the offer, around 78% were back on the job market within a year.
This suggests if an employee has reached the point where they’re ready to leave, there are usually significant factors behind the move beyond the desire for more money.
A 2015 report found while a 15% increase in compensation package was the top driver for procurement professionals seeking to move roles (51.3%), more comprehensive benefits (46.1%) and a better work-life balance (44.9%) were not far behind. Procurement staff were also highly motivated by the prospect of working with more talented colleagues.
Clearly, the best way to keep hold of your most valued employees is to make sure they know they are valued. Have regular catch-ups and learn their motivations and visions inside and outside the company. Ensure they have platforms to voice concerns and issues before they escalate, and hopefully pre-empt any thoughts of leaving.
If it does come to it and you really don’t want to lose them, I think it is always worth making a counter offer. Don’t make it only about financial remuneration however, as that will not address their deeper reasons for wanting to leave.
Try to match the offer to their goals. If they are leaving for a position with more flexible working or extra training, meet those needs if you can.
If you can’t commit to such changes, don’t counter offer or they will ultimately get frustrated again and leave anyway.
I believe if someone is good and their head is still in the game, it’s worth a counter offer. If their heart is set on leaving, stay in touch with the view that your paths may cross again. You’ll then have someone with greater loyalty and drive if they realise the grass isn’t always greener.
Saffa Ayub is managing director at Bramwith Consulting
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.