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How to work with a counteroffer and prevent layoffs

ITExpert team 07.12.2022
ITExpert Blog HR
How to work with a counteroffer and prevent layoffs
How to work with a counteroffer

A counteroffer is an offer from a current employer that competes with an offer the employee received from another company. It is done to convince a person to stay.

Counteroffers are becoming the new normal as the number of employees who leave their own accord has only grown over the past 20 years. According to ITExpert’s experience, 25% of specialists still accept the counteroffer.

Using the example of large companies, we will explain why employees leave the company, whether it is worth trying to “return” a specialist, and in what cases it is necessary to leave for good.

Why employees are given counteroffers

According to HeadHunter’s Career Research Service, 55% of employers do not anticipate layoffs. At the same time, 47% of survey participants increase the salary of valuable employees if they decide to quit, and 32% offer a promotion.

The main reasons to make a counteroffer are:

  • finding a replacement is long and expensive;
  • training and onboarding for a new employee are needed to be conducted;
  • employee turnover can damage the company’s reputation and employer brand;
  • an employee is a valuable and rare specialist.

The first signs of employee dissatisfaction can be noticed even 9 months before the dismissal — found at Peakon, a company that develops tools for assessing employee engagement. A business is more likely to affect the employee’s decision to leave if the employee does not yet have an offer, but there is a desire to change the company, management, position, or income level.

Interesting to know: AI (artificial intelligence) and predictive analytics allow you to capture changes in employee behavior. With the help of technology, it is possible to evaluate the semantics of texts in business correspondence and draw conclusions about the emotional state of the staff.

For example, at IBM, AI algorithms predict layoffs and relay the information to the manager. One tool for measuring engagement and monitoring behavioral change is the Bunch.ai app.

Boring tasks and a toxic manager: top 4 reasons for dismissal

The American platform Peakon polled 32 million employees from 125 countries and identified the most common reasons for quitting:

  1. Boring tasks. People who achieve results in large projects become more productive and interested in their work. And vice versa: an endless stream of uninteresting tasks with no noticeable result increases the risk of dismissal.
  2. Inability to discuss salary. To stay engaged, it is important for an employee to understand that they receive a fair salary and bonuses for their work.
  3. Relationship with the manager. If an employee has little contact with the manager, does not receive feedback, or if he believes that the manager is toxic, the likelihood of quitting increases.
  4. Lack of development. Stagnation reduces motivation and the desire for achievement — 9 months before leaving, the employee’s involvement begins to fall and reaches a minimum before leaving the company. Loyalty, which is usually responsible for the desire to stay in the company, also decreases.

Recognize employee accomplishments, give feedback, hold one-to-one meetings with executives, and invest in staff development. Remember that financial motivation is not the main thing. Officevibe data showed that 89% of employers believe that employees choose competitors because of higher salaries. In reality, only 12% of layoffs are for financial reasons.

How to determine the level of staff engagement

We have already mentioned how to neutralize the counteroffer. But how do you keep an employee at work? First of all, spot in advance the first “red flags” about the person’s intention to leave. Do not delay until a person comes with an offer from competitors — initiate a meeting and regularly monitor the condition of employees. For this purpose, conduct tests:

  • eNPS method (Employee Net Promoter Score). It shows which of the employees is ready to be the company’s ambassador and recommend its applicants. To do this, the staff is asked this question: “How ready are you to recommend the company on a scale from 0 to 10?”, And based on the answers, employees are divided into three groups: critics, liabilities, and ambassadors.
  • Gallup Q12 Questionnaire. Employees are asked 12 questions that affect different areas in the company: “Do you know what is expected of you at work?”, “Do you have friends among your colleagues?”. Employees, depending on the question, need to answer “yes” or “no”, or rate it from 1 to 5.

It is useful to conduct exit interviews with people who are leaving. This way you will collect information about the reasons for the dismissal, internal problems of the team, and opportunities for growth.

Monitoring the mood in the team is important for management and HR specialists. It is also worth understanding which of the staff is “questionable”: they do not share the mission and values ​​of the company, do not take part in corporate life, and show low involvement in business goals. If an employee is in the right place, with interesting tasks, he or she has a perfect match with the company in terms of skills, goals, and plans — this will keep him from quitting.

How to retain valuable employees: Lego, Apple, and Patagonia cases

How to prevent a valuable employee from quitting and increase team loyalty? Track trends in HR, implement the Total Rewards package, and use the experience of international companies. We found interesting cases.

Conduct onboarding programs

It happens that employees quit before having worked for the company for not even a month. One explanation is the lack of onboarding. According to research, 26% of new employees leave companies if they do not have an onboarding and training program. And 44% of survey participants admitted that they thought about quitting in the first month of work.

For example, the consulting company Deloitte used a video game format for onboarding. New employees had to choose a destination — Beijing, Shanghai, or Hong Kong — and “fly” to this city to communicate with employees in the Deloitte virtual office and study Internet etiquette and the company’s corporate culture.

Use gamification

Turn the workflow into a game — this activates the think tank that responds to rewards and stimulates the team to achieve their goals:

  • At SAP software development company, after introducing gamification into the brainstorming process, the number of ideas increased by 58%.
  • The use of gamification in the learning process at Deloitte made it possible to speed up the development of the program by 50%.

Integrate learning and workflows into earning points, moving to new levels, and open access to the rating table to track progress.

Give more freedom

On the Lego Ideas website, you can offer visions for future products. Options that collect more than 10,000 likes are considered by a commission of experts. If the product is put into production, the authors of the ideas receive a 1% royalty.

IT company Intuit has “time for creativity” as employees are recommended to spend 10% of the working day on new projects. Hours can be accumulated and discussed with colleagues on how to solve complex problems. This way the team responsible for the new Quick Books project saved up time for several months until they brainstormed and created a prototype mobile version of their product in a week.

Have fun

Apple, with more than 147,000 employees, throws beer parties. This is an annual event that takes place on the first Friday of December at the company’s California campus. Teams spend time in an informal setting and listen to famous pop musicians — for example, in 2017, Gwen Stefani performed in front of Apple employees.

And American outdoor clothing brand Patagonia, with 2,400 employees, hosts a surf party. When the surf season kicks off in California, workers head out to “catch the wave.”

Consider generational differences

From X to Z — different generations are attracted by different perks. For example, zoomers focus on the development of skills and plan career development themselves, and do not rely on offers from the company. Generation Z is also health-conscious, focusing on health benefits in social packages, office air quality, and food choices in the corporate kitchen, — writes generation expert and author of “Generation Z” at Work, David Stillman.

ITExpert specialists provide consultations on creating vacancies that will “hook” the target audience, as well as on working on the employer’s brand in IT, and perks that increase employee loyalty.

Who should be kept and who should be let go

Have you missed the first red flags and a good employee wants to quit? The further scenario will depend on the circumstances and reasons for leaving.

When the reason is serious and the company cannot influence it — for example, the relocation of an employee — accept the situation and part ways so that it doesn’t “backfire”. When else is it worth accepting the fact of quitting? If an employee did not like something in the company and he/she came with an offer from a competitor, it is risky to keep him. According to statistics, 70-80% of the staff who accept a counteroffer leave the company within six months.

The main question that the manager and HR specialists should ask themselves is: will the counteroffer solve all the possible problems and dissatisfaction of the employee at the current place of work? If the negativity cannot be eliminated by reviewing the salary and the perks, discuss the conditions for the person to leave and work on the mistakes that can take away more than one employee.

When a counteroffer is definitely needed: if it is a narrow-profile specialist, who are few on the market. If an important employee is not lured by a counteroffer, discuss the time for the search and adaptation of a replacement.

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Do not keep employees if you see that you are not on the same page. Dissatisfied employees will not bring results to the business. Shoe brand Zappos even practices being fired for money. Managers offer the employees to receive $2,000 and leave if they understand that they do not fit into the corporate culture and don’t share the mission of Zappos.

Companies conduct research on their target audience, and almost never on their employees. It is important to take a holistic view of the “team-product-client” system and understand that the staff always express what they feel about the project. Happy employees make as much of a difference to your business as happy customers, so start taking care of them.

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