Burkland - Start Smart, Scale Fast
The Smarter Startup

Why Creating a New Job to Retain Someone Can Be a Bad Idea

You most likely have bought yourself a short amount of time with this employee before the same issues that caused them to look happen again.

On a Thursday afternoon at 4 pm one of your solid performers sends you a Slack message asking if you have time to connect. They let you know they have accepted an offer with another organization and would like to give you their notice. They do mention they would love to stay with the organization and that it was a difficult decision.

You immediately convene as an executive team to discuss if you should make a counteroffer to retain this employee. This was not in your budget for the year, but you decide it makes sense to offer a promotion with a new title and a salary increase to the employee. They accept your counteroffer and decide to stay on with the organization. Great news, right?

Maybe not. You most likely have bought yourself a short amount of time with this employee before the same issues that caused them to look happen again. Right now you have only changed their salary and maybe their scope of work. Everything else about your culture is the same. Worse yet, this employee might have shared the news with their team and now the company has several new promotion requests.

You have most likely heard that 80% of workers who accept a counteroffer leave within six months. This has no factual data backing up the claim, it appears to just have become an accepted myth. That doesn’t mean in this current environment people will not go back to looking.

There are several issues you have now created:

  1. You have signaled to other employees that the way to a promotion is to go look for another job.
  2. You have likely created compression issues with this salary increase that will prompt others to ask for raises soon.
  3. You have created a job with no structure or plan in your company.
  4. Finally, you may have signaled to your absolute top performers you value something different from them; thereby putting them at risk of questioning your judgment and leaving.

If you want to feel better prepared for this in the future let’s talk about performance management, engagement, and succession planning. It can help the team know when to be strategic about these decisions and have better organizational planning in the future.