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Is a Counteroffer the Answer?

Chiropractic Economics January 18, 2001

The dilemma: A key employee gives notice that she is leaving to take another job for more money. Do you make a counteroffer to persuade her to stay?

In speaking with a wide range of professionals and office managers, the consensus seems to be “no.” The reason: The problems caused by counteroffers often outweigh the benefits. For example, if concessions are made and the employee stays, it may lead to resentment among other employees who feel they, too, deserve a raise, additional perks, a change in work schedule, or whatever.

Worse yet, a counteroffer to a departing employee may lead to a chain reaction, prompting other employees to use the same tactic to gain concessions. In addition, if the departing employee has repeatedly asked for a raise and been denied it, he may resent the lengths to which he had to go, (i.e. giving notice) to finally get the raise he felt all along he deserved. At the same time, you may resent having to make such a concession under duress.

Resentment on either side, let alone on both sides, is sure to erode employer-employee relations and the spirit of teamwork so necessary in a successful practice. Reality check: The one exception: a key employee who is critical to the day-to-day operation of the practice. In the long run, it may cost more to replace the person than to retain him or her. Consider making a counteroffer in such a case, and take a chance that the aftermath will be smooth sailing.

Filed Under: 2001, issue-10-2001, Magazine Issues

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