Team member resigned trying to get counter offer

Question

I am managing a team and I have a new member in my team. She has been with us less than a year. Policy in the company doesn't allow raises before finishing the first year of employment. I told her that I appreciate her work and that she was up to my expectations and she was the output of more than 50 interviews for this position, I think this made her conceited a little bit. She submitted her resignation telling me that she is not happy with her salary trying to get a counter offer! From a management perspective, what would you suggest? given that:

1. She is a good and qualified member and don't like to lose her and enter the search for another candidate once again.
2. We are paying her better than what the market is paying in general (so we are above the average in paying in the market for her position)
3. I don't like to have this as a trend or behavior in my team because whatever I pay you, you would like to have more! this is the nature of human.

So, if you were in my place what would you do? or what you suggest me to do in such case

Answer 1

From a management perspective you have 2 normal strategies when being strong armed with a formal resignation.

If you absolutely need the staff member for something you retain them however you can while you search for a replacement and until you can get rid of them. This is a company fail, because no one should be needed that much, but it does happen.

If you don't, you wish them the best of luck and let them go.

When someone is at the point of handing in their resignation, they already have one foot out the door, there is negligible chance of them staying for long whatever happens, the whole employee dynamic has changed for them.

Answer 2

So, if you were in my place what would you do?

You either keep to your no-raises-in-first-year policy, and explain that to future candidates so they won't even bother asking and her you tell now a stern "no" to the demand, or you speak to the higher ups and agree to drop the policy.

Keeping it obviously has upsides like more stability, but then you have to understand that loss of talent like this one will keep happening, because whenever you will find someone who truly shines in their role, much higher than you expected, they will likely want to have their compensation fixed accordingly, and if they won't get it from you, they will get it somewhere else. And that is likely what has happened, she either already found a greener pasture, or is off to hunt for one.

Answer 3

Wish her all the best, and regretfully start the hiring process over again. Either she's as good as she thinks she is, and will quickly find a better job at a better salary, or she's making a big mistake that she will soon regret, but either way she's made her decision, and you'd be wisest to let her stick with it. From this moment forward, all her decisions are hers to own, they aren't your problem anymore.

If this becomes a pattern, then you aren't as competitive an employer in today's market as you thought you were. (Maybe it's not salary --maybe this is an unappealing workplace for some other reason?) Short of that, you have to chalk it up to the unpredictability of individual human beings.

A final thought: As noted by @elrobis in the comments, in some industries, notably IT, it's increasingly common for ambitious young employees to job-hop frequently. It's often considerably easier and quicker for a competent junior programmer to get raises and promotions by moving from company to company than by staying in one place. It would probably have been smarter of her to have secured the next job before quitting this one, but again, that isn't your problem any more.

Answer 4

She is a good and qualified member and don't like to lose her and enter the search for another candidate once again.

If retaining them and paying more still works out as a net benefit vs. the costs (monetary and time) of recruiting to replace her it may be worth bending the policy. As a manager your responsibility is to get the best outcome for the company. On the other hand if you think you can replace her with minimum fuss and hassle then wish her luck and move on.

I don't like to have this as a trend or behavior in my team because whatever I pay you, you would like to have more! this is the nature of human.

It's easy to fall in to the trap that entertaining this request must necessarily influence the future - yes she might talk to others (or they may simply observe it play out) and they might do the same. But remember that for that to happen the others will have to secure leverage in the form of higher paying offers elsewhere (which since you state you are already paying above market is going to be limited), sure the vast majority of people would like to be paid more, but only a subset of those are going to be able to apply any weight to that argument.

I understand the reluctance to set any precedent by acquiesing to this request but the only precedent you need to be setting here is that you consider each individual case on it's merits. Policies can be great tools for the general running of a business but you should never let rigid adherence to them harm the company instead.

From a management perspective, what would you suggest?

I tend to be of the opinion that hiring people is a crapshoot at best - you can never completely eliminate the possibility of hiring someone who turns out to be a mistake. And at best it's time consuming and costs a certain amount of productivity. So assuming budget allows I'd be tempted to offer her an increase inline with what you would have considered doing had this been at the 1 year plus mark and make it clear that this offer is that increase brought forward and that no additional raise will be considered at that point. This doesn't guarantee that she won't resign for a better offer elsewhere at that point - but it does make it clear that she can't do so purely to ellicit a counter, she's played that card now.

IMO this gives something to everyone:

What she gets:

• More money now - and the extra she earns between now and when the raise would normally have been possible is straight profit.
• Acknowledgement that she's worth bending policy for - it's non quantitive but many people consider this pretty valuable.

What the company gets:

• Retains a "good and qualified" staff member
• Avoids recruitment costs (time and money)
• Time - you know now that she's a potential flight risk, get some contingency plans in place in the event she bails in the future.

Another thing to consider is that you can also consider this a re-negotiation of sorts - if she's asking for something else you can do the same. You don't say what sort of work they do but if applicable you can look at increasing targets etc.

Answer 5

How much of what you said is fact, and how much is your interpretation?

Did she say she wanted a counter offer or are you just assuming that's the case?

How certain are you that you're paying her above-market? Remember that 'the market' is not some homogenous list of job titles. You could easily have 2 people with the same job/title where one of them is worth 50% more than the other, and the market for those kinds of people really is different to the market for everyone else.

Is this the first time she's brought up her salary or is it an escalation from something previous?

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Based on what you've written so far, this would be my advice:

If you want to keep her, and would have been willing to give her a raise at her 1-year mark, and if she is in fact looking to stay, then offer to give her the raise early. Be explicit about the fact that this is instead of, not on top of, the annual raise conversation.

And also have a frank conversation with her. Make it very clear that you use the nuclear option and have it forgiven maybe once in your career. If she ever quits again there is no hope of a counter.

And then make sure that if she ever does quit again, you're in a position to let her go.

Answer 6

Per your question:

She submitted her resignation

Great, start the knowledge transfer/documentation process. She has checked out mentally; say your farewells.

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This is a load of hogwash and you know it.

Policy in the company doesn't allow raises before finishing the first year of employment.

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What positive outcome do you foresee by convincing them to stay? Her staying only benefits you as you have clearly expressed in the hogwash above.

During my most recent job change management decided to match my new company's offer within 2 days of me providing my resignation letter, effective immediately if I accepted, which was a 24% raise.

Do you think I felt humbled that the company graciously underpaid me for years? Absolutely not, I had checked out; good luck to the company.

Answer 7

The main aspect I look at in these situations is the market value of the person's skills and experience, slightly adapted to the current needs/shortages of my company.

Almost everybody wants more money, until they reach a comfortable spot where more money is almost unnoticeable. And then they still want more because at the end of the day, money is the tangible form of appreciation they are receiving from the company, even if it dulls over time as they get used to it.

Almost everybody gets more money when they successfully switch companies, so the argument "hey boss, give me more, I have a counter offer" is rather easy for the employee to make, no matter if true or false.

So if you decide on the market value of the person, you know what you should pay. If you are paying less, then it should be your pro-active best interest to pay them more. Don't even wait until they come to you.

I had cases where I onboarded someone very young and inexperienced and they turned out to go up the rungs like a rocket due to awesome abilities. In that case, do your very best to increase their salary as quickly as you can. If they google around for offers, and all other companies offer roughly the same as you, not only will they be glad that you are appreciating them, but they also have little reason to actively job-hunt.

I had cases where I knew I had to pay them more, but my company processes did not allow for it even after me trying hard with my higher-ups. I have told people to go looking for greener pastures in this case. Nothing else to do, really. Some of them were appreciative of my honesty enough and are still with me after many years now.

Answer 8

All of these strategies are extremely short sighted. They all approach the problem as if money is the only way to solve this problem. More money keeps the employee and lessens the amount of effort taken to replace the person, or less money gets a new employee but some more work in finding a replacement. The fact that this whole process has been boiled down to a money versus inconvenience argument tells me there are more problems going on than this. And that someone would suggest that "This is a company fail, because no one should be needed that much," suggests that it's culture problem universal to business, and not just this company.

Any problem involving a person must first be solved by understanding the humanity of the people involved. Until that is done it will be impossible to create a culture where people want to stay. People stay when they feel appreciated. People are loyal when they are respected. People become assets when they are allowed to thrive themselves.

And the fact that the employee felt they had to create a drastic bargaining situation instead of having an open conversation about their needs with their boss/manager speaks volumes as well.

The first step in solving this problem has nothing to do with money. It has everything to do with humanizing, empathizing, and understanding your employees.

Start there and it will be easy to see what the next steps should be.

Answer 9

Ask her to Bring Another Job Offer

I recommend you stress that the one-year rule is in place for good reasons and that you are not in a position to waive that just per an employee's demand. Instead, recommend to her, "rather than resigning as a first move, take some time to hunt for a new job, and when you have a better offer, present it to us, then we'll be in a better position to reconsider your compensation."

This has the benefit of shifting this from a negotiation based on power, to a negotiation based on two concrete numbers. She may never find her other option, and the problem goes away, or she may, and you can calculate clearly the best option.

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Edit:

Folks, these recommendations of just-let-her-leave from many of the answers and comments miss the point entirely. Employee is not resigning so much as negotiating hard; were she straightforward resigning, she'd be gone and we'd not be having a discussion. WEB has thought of accepting and wants to avoid it if possible. WEB is looking for alternatives.

Answer 10

If I were in your place, then I would have talked to the management and if management approves her pay, then I would tell her that we can raise your pay in 1 condition. If she agree to sign a document which says: She will not leave the company in next 1 year, whatever be the reason.

If she agrees, then its a win-win condition for both of them.

Note: I am not sure if it is legal. So, please confirm with your company lawyer before asking her to sign a document.