One of your most valued employees just resigned to take another job. What do you do? In this column, Andy Weeks suggests a plan of action that will help you determine when to fight to keep the employee and when to let him or her go.
We were putting together a strategic plan for my division of the company and were preparing to roll out the organizational changes when one of my valued employees submitted his resignation. This particular employee factored heavily in our organizational structure because he had a very unique skill set that we wanted to emphasize.
This employee, who was hired before my arrival, had been underpaid and had seen the company hire people at a higher salary even though the new employees had less skill and experience than he had. To compound matters, he received an offer from a customer of ours who was proposing a quantum leap in responsibilities and a very attractive compensation package.
There are few worse feelings for a manager than when a valued employee announces he or she is leaving for a better opportunity. Here are some steps IT managers can take to try and keep a valuable employee on board.
Analyze the situation
The first step is to determine specifically why the employee is leaving. If you understand the reason, then you may be able to address the problem and convince him or her to stay. Sometimes the employee will tell you right up front, but be aware that it can be difficult to tell if he or she is telling you the full story.
In this case, the employee gave me what I consider the standard response: He was leaving because he had been offered a better opportunity. This is the safe answer, because it’s not about your company, and the employee doesn’t have to tell you the difficult truth. And occasionally, it’s even true.
After sitting down with the employee, we determined that he was not only looking for new challenges but also was concerned that he was purposefully being kept from advancing because his current skill set was so valuable. This feeling was coupled with an overall impression that he was being underpaid when compared with the market.
When is it best to let go?
When an employee resigns, my immediate reaction is often Oh no! What will I do now? In some cases, the departure really is best for both parties. An unhappy employee is difficult to manage, tends to disrupt the effectiveness of his or her team, and will most likely leave eventually anyway.
In fact, some managers have a set policy of not making counteroffers when employees threaten to leave. One HR manager says, “Usually it is our own fault, something that we failed to do or perhaps behaved poorly. In either case, I don't believe in counteroffers, mostly because neither party can be trusted anymore.” Another manager says, “Once the employee has given up allegiance by accepting another offer, even if their employer provides lucrative enticement to stay, they rarely stay for long. The employer is better off letting them go and seeking a new replacement right away.”
In this case, the employee really was looking at a better opportunity, better than we were going to be able to offer him in the short term, although his long-term outlook with our company was better. As a result, we did decide to make a counteroffer but were also willing to accept his decision and send him on his way with our full support.
Understanding the reasons for leaving
Let’s examine the reasons this particular employee was looking to leave and the options available to me. Of course, anticipating these problems and addressing them before an employee decides to leave is the most effective strategy. If you decide to address the core issue, you need to take action quickly because the employee will be gone in two weeks if the situation doesn’t change.
Most employees want to see some type of job progression. If they do not see opportunities to grow both in capability and responsibility, then they will seek other opportunities.
Can you keep them? Yes, if the employee is ultimately a candidate for advancement.
Strategy: Move immediately to give the employee additional responsibility and define his or her long-term job progression.
Although you can’t ultimately buy out the other objections, for some employees, their total compensation really is the root cause for leaving.
Can you keep them? Yes, if you can meet or exceed the employee’s other offer within your compensation structure.
Strategy: The risk of making a financial counteroffer will be the response, “If I am worth this now when I am leaving, how come you didn’t pay me that much before?” This is especially dangerous if you have hired other employees into similar positions at a higher salary. You must address this outright and let the employee know that you have full intentions of paying a fair salary for his or her capabilities, and then give the employee a reasonable counteroffer.
Making the counteroffer
If you believe the employee’s concerns can be met, the next step is to sit down with the employee to make a counteroffer. Your counteroffer should start out by affirming the value of the employee and reflecting that you would like to find a way to keep him or her. However, you also need to let the employee know that you want what is best for him or her and will support the employee’s decision if he or she decides to leave.
The next question is critical. Ask them, “If I can find a way to address your issues, would you consider staying with us?” If you cannot get at least a partially positive answer, then your task will be difficult indeed. Then give a frank statement of the problem and what you will do to address it.
Did the employee stay?
Once an employee has made the decision to look at other opportunities, the odds are stacked against you as a manager. You can turn the situation around, but it takes intelligence and determination. And if you successfully convince an employee to stay, it is critical that you do what you said you would do when making your counteroffer. Otherwise, the employee will be back in your office resigning again, and this time you won’t be able to keep him or her.
In this case, unfortunately, the employee did decide to leave us. In the process, though, I learned a lot about my new division and the issues I was inheriting. This enabled me to work to resolve the issues to prevent the loss of other key employees.
Do you issue counteroffers when an employee threatens to leave? Post below to share your thoughts on this tricky management decision.