Employee Retention: What You Need To Know by Bernie Reifkind

Posted by Bernie Reifkind on June 18, 2008

Keeping your best performers may be the single most important business strategy. If you are an employer, it has happened to you or I guarantee that it will at some point. A valued employee announces a departure for another job and a lot more money.

Here is what not to do: Match the company’s offer. In so doing you create a pseudo-auction negotiating environment. Other employees will bring in offers, hoping those will too be matched or bettered. Perhaps a better approach is to find out the real reason why this employee is leaving. The number one reason that people change jobs is their boss, not the money. What if you can offer significant change or a more fulfilling challenge to this person’s job?

Here is what to do: Ask about the departing employee’s long term career plans. Although he or she may get more money elsewhere next year, or maybe the year after, explain the long term advantages of the career-building opportunities you have to offer. Point out that “hire-away” big bucks salaries do not always increase as hoped.

Research shows that candidates that accept counter offers of more money are likely to be continuing to job search and in many cases can destroy the company or team morale. In the mean time, your bottom line has been affected.

Counter offers may be counter productive unless the real reason for departure has been addressed.

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