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Analysis by Engineering UK shows that demand for skilled labour is outstripping supply across the engineering and manufacturing sectors. April to June 2017 saw the highest vacancy ratio in the labour force since 2001, at 2.6 job vacancies for every 100 filled jobs.
In this candidate-led market, when a valued employee intends to move on it’s no surprise that many employers consider making a counter-offer in order to retain their services.
But how do you decide whether making a counter-offer is the right thing to do?
1. Understand why
First, it is important to understand the employee’s motivations for looking for an alternative role.
A recent snapshot of the information provided by engineering professionals to Jonathan Lee Recruitment showed that there are a variety of factors that influence the decision to move on. Salary is rarely the sole driver.
Employees can be enticed away by job content and more challenging work, remuneration and benefits, greater recognition of skills, abilities and contribution, better personal and career development opportunities, or dissatisfaction with a manager or the business culture. Unless you understand the key drivers for the employee, it’s impossible to know whether a counter-offer will truly address the underlying reasons for the move.
2. Avoid empty promises
Experience shows that more than 80% of people who accept a counter-offer still leave the business within 12 months of their initial resignation.
The explanation for this is simple. Most people are anxious about change and therefore, when a current employer offers more money and tells them that they are really wanted or that the things that frustrate them will change, they are often tempted to stay with the familiar.
However, if the employer can then not deliver on the promises made, or if addressing the issues was not reasonable or achievable in the first place, it may well be best to part ways sooner rather than later.
3. Get ahead of the game
However flattering, a counter-offer is often regarded by the outgoing employee as a belated recognition of their value in response to the threat of losing their skills. This can leave a sour taste. Why does it take a third party to recognise their worth before you do?
Make sure that any counter-offer is perceived positively and will not cause future problems.
You also need to consider the effects on other employees. If they see a colleague receiving a promotion, pay rise or increased benefits as a direct result of handing in their notice, might they follow suit?
If you have great people that you want to keep, make sure you have a plan. Regular communication, succession planning, career development plans and reward schemes are all ways in which a supportive employer can ensure that staff feel motivated. Employers need to understand the motivations and ambitions of their staff and keep them engaged for the long term. Action is always more positive than reaction.
What if it's me receiving a counter-offer?
How do you decide what to do if your employer makes you a counter-offer? Here are some questions to ask yourself:
"Will the situation here really improve just because I said I was leaving?"
"If I stay, will my loyalty be suspect and affect my chance of advancement?"
"The pay rise makes me very expensive for the job I am now in. How will that affect any future rises or external prospects?"
"I received this counter-offer because I resigned. Will I have to do that the next time I think I am ready for a pay rise or promotion?"
Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.