This is the third section of a three part series on a common occurrence in today's hot job market - COUNTER OFFERS. The first two sections covered 1) counter offer from the candidate's viewpoint and 2) from the employer's viewpoint who is attempting to hire a new employee. This segment will address the counter offer issue from the position of the employer whose employee is resigning to accept another position.
I. WHY IS COUNTER OFFER AN ISSUE TODAY FOR EMPLOYERS WHO ARE ATTEMPTING TO RETAIN THEIR EMPLOYEES?
You, as an employer, are at risk of losing employees due to the condition of today's market. There is a greater demand than ever for tax professionals, especially those who specialize in the high demand areas of International and Multi-State taxation.
II. HOW TO PREVENT COUNTER OFFER FROM OCCURRING AT ALL!
A. HIRING PROCESS.
The very first step you can take to prevent a counter offer begins with the hiring process. A solid "matching" is essential for both long term and short term success of the hire. Before considering making an offer, you must clearly understand the need and wants of the candidate, as well as your needs and wants as the hiring official. A match must exist or else there will be a high risk of losing or having to terminate the employee at some point in the future.
The following issues should be considered in the matching process: technical experience, short term/long term career goals, compensation, work ethic (weekly hours, travel), management style.
B. SET UP A MENTORSHIP PROGRAM "COMMUNICATION IS THE KEY."
It is essential that you have a mentorship program in place within your department. From the first day a new employee joins your department, there must be regular discussions with them as to how they and you are both doing in reference to meeting each others needs and wants.
RESPONSIBILITIES OF THE MENTOR.
The job of the mentor is to assure that the company has an open two-way communication for the purpose of understanding the mentorship needs and wants on an ongoing basis and vice versa.
a. The mentor must continually indentify the needs and wants of the mentee and consult with them regarding the reality of those needs and wants. This should be done on a regularly scheduled basis. Sessions can be scheduled during the day, or less formally, at lunch or after work. Mentor should probe as to how the mentee is doing and find out if they are happy, as well as provide feedback on how the mentee is meeting the company's needs and wants. It is critical that you get this feedback from your mentee, so if there is a problem, you can address it and correct it early. This is a preventative measure..... a way to ensure that both parties are working to meet each others needs and wants as they evolve.
b. The mentor must motivate the department and/or company to meet the changing needs and wants of the mentee providing his/her requests are reasonable. The mentor may also have to determine if the mentee should continue to stay. If the needs and wants of both parties are no longer a reasonable match, a parting of the ways may be appropriate.
c. Do not under estimate the influence of your mentees' spouse on their success. Be sure to plan occasional social events where the spouse is included. If at all possible, have your spouse establish a relationship with your mentees' spouse which could include an occasional lunch or dinner. This is especially important during the first six months after the mentee comes "on board".
WHO SHOULD BE A MENTOR?
A mentor should be at a higher level of experience and in a higher position than the mentee. Example: a supervisor can mentor a staff person, or a director can mentor a manager. A peer within the department should not serve as a mentor. It is also important for an individual not to attempt to mentor too many mentees at one time. This will only lead to a lack of effectiveness. The top tax executive should assign a mentor to each new employee based on the (1) the level of the new employee, (2) personality match between new employees, and potential mentors, and (3) also evaluating who has time to be a mentor based on work load.
RESPONSIBILTIES OF THE DEPARTMENT HEAD.
The department head should create an "open door" atmosphere so that any employee feels encouraged to discuss career issues with them directly, if the relationship with the mentor is not successful in their mind. This is a safety valve and, if promoted, will ensure that no surprise occurs at the time of an employee's resignation.
III. HOW TO HANDLE AN EMPLOYEE'S RESIGNATION WHEN IT OCCURS.
We want to make it absolutely clear that your responsibility as an employer should be to PREVENT a counter offer from occurring. If you diligently implement the suggestions above, you will rarely, if ever, be forced to consider the option of offering a counter offer.
However, if an employee turns in his/her resignation without an earlier communication of their unhappiness, you must first analyze the situation and then respond appropriately.
There are three main reasons why an employee chooses to resign. You must determine which category your employee falls into so you know how to respond.
Category #1: The employee's needs and wants can no longer be met by the position they are in.
Example: You hire a tax professional to do a split between operational planning and compliance review with the expectation that they will move into transactional planning within one year. Keep in mind that this was clearly the primary reason the employee accepted your offer. At the end of the first year of employment, your company dramatically slows down all transactional activity with no plans in the near future for this to change. You can no longer meet the needs and wants of your employee since their ability to do transactional tax planning is no longer available.
Therefore, you now have a "mismatch." If there is a true mismatch, making a counter offer is fruitless.
Category #2: Your needs and wants (as well as those of the department) cannot be met by the employee.
Example: During the hiring process, you clearly communicate the need for this employee to move into a new level of sophistication in their work after one year. As it gets close to the one year timetable, it is evident to you the employee is not going to be ready to do such work and therefore will not be able to accommodate your need. However, prior to you taking action, the employee makes you aware that they have an opportunity with another employer.
At this point, it is obviously not appropriate to make a counter offer - offer your employee the best of luck in their new endeavor.
Category #3: The last category is pure miscommunication.
It is possible for there to be a match in both the employee's and employer's needs and wants. However, an employee might be making an errant assumption about their needs and wants being potentially met by you.
Keep in mind, if the employee approached you in the past with these same concerns and you DID NOT respond at that time, OR you made promises which you did not keep...YOU WILL HAVE NO CREDIBILITY AT THE TIME OF THEIR RESIGNATION TO ADDRESS THESE ISSUES. In other words, it is too late to attempt to respond to the employee's concerns since he or she will view your actions as being taken at the "eleventh hour" and clearly under duress. (See Counter Offer Article - part I from the employee's viewpoint).
On the other hand, if the employee never approached the mentor or the department head (prior to their official resignation) to express their concerns, then it is possible to make an attempt to communicate with them as to why they are resigning and whether you can correct their situation. This is not without considerable risk as we point out below.
IV. BEFORE YOU EXTEND A COUNTER OFFER CONSIDER THESE POINTS.
The thought of making a counter offer should be seriously evaluated. Having a counter offer accepted is a "mine field" with many possible negative ramifications. That is why it is essential for you to implement the preventive measures highlighted in Section II. The following must be considered:
Be aware that a counter offer can negatively impact your other employees.
You have set a precedent that if they want you to respond to their needs, "threaten to leave." In essence, you have unknowingly created a "Reward Disloyalty" policy. It is hard to imagine how you can retain your credibility without extreme extenuating circumstances.
Be prepared...if compensation has been adjusted, all of your employees will know and you will be hard pressed not to make across the board adjustments immediately or risk mass turnover.
If special treatment is perceived to have been given to the employee you make the counter offer to, you will be under extreme pressure to eventually justify these actions.
Be prepared for being under a microscope! The employee who accepts the counter offer will be holding you to every promise you made and rest assured that others in your department will be watching closely for any special treatment this person receives. You have put yourself in a "no win" situation unless there are extreme extenuating circumstances.
V. DAMAGE CONTROL AFTER A COUNTER OFFER IS MADE.
If you still persist in making a counter offer, below are a few suggestions on how to potentially minimize the negative impact of such an act.
Be Proactive! Think ahead and approach the other employees who you believe will be the most affected by a resignation/counter offer scenario, BEFORE THEY HEAR IT FROM OTHER SOURCES.
Communicate openly with them the facts of the situation. Allow them to get their questions answered so they will not have a misunderstanding of what actually occurred.
Remember, you have set a precedent and you will have to live with it. Cover your head and watch for the fallout!!!
