by Melissa Hook

In an environment of nearly full employment, executives frequently ponder the appropriate response to the valuable team members resignation. Should the firm follow Michael Bloomberg's lead by responding "OK"? Or should it determine the reasons and craft a counter offer?

Although most executives find feedback from a departing executive helpful, many lament that counter offers are counterproductive. The exception, perhaps, is the rare occasion when the parties discover and deal with a clear lack of communication between them. Or -- as is frequently the case with Information Technology employees -- when the employee has developed skills the firm cannot afford to lose, and has learned how to exploit his/her indispensability through counter offers.

In executive search, candidates are frequently counseled to expect a counter offer. While flattering and gratifying, there are numerous reasons to gracefully decline:

• Counter offers are often perceived as "buy-backs"; the firm is essentially buying the executive's agreement to stay. The message being sent, however, is that his/her perceived value has now changed, earning the executive the pay he/she is worth or the promotion he/she deserves.
• Not only are they detrimental to team morale, but counter offers convey that such a tactic is an effective impetus for executive raises or promotions.
• The executive who accepts a counter offer is frequently branded disloyal (to the employer and/or potential employer), and no longer a team player, ultimately subjecting him/her to exclusion from critical information due to the perceived "infidelity."
• When the time comes for the next raise or promotion, will it happen? Or does the counter offer take the place of the future raise or promotion because it was positioned as a promotion that was "in the works"? Without a compelling reason that it was not previously disclosed, the offer is likely in lieu of the next step.
• Executives who accept counter offers are often the first to go. Even if no reorganization occurs, succession planning usually begins immediately -- the counter offer is a stop-gap measure giving the firm time to find a replacement. Statistics vary by source, but it is estimated that between 60% to 80% of employees who accept counter offers are not with the organization one year later.
• A counter offer challenges the executive's decision making skills by requiring the candidate to break a promise to the new employer. In addition, the counter offer conveys little respect for his/her integrity, convictions, intelligence, and confidence.
• If the new opportunity offers something that is missing in the executive's current role, it is unlikely that the counter offer will fill that gap. Considering the variety of issues that piqued the executive's desire to consider the opportunity, it is unlikely that a counter offer alone will resolve them.

Every successful executive receives calls from executive recruiters; many also take the time to listen to them. However, before the career exploration gets to the next step, it is likely that he/she has taken a hard look at his/her opportunities for professional growth, including options in staying put. In a well managed firm, the lines of communication are open; they provide executives with a clear understanding of future opportunities and the ability to openly discuss problems.

The decision to accept an outside offer is a time-consuming and often difficult one, made after examining all the issues and reasons for staying or moving on. While a counter offer may be an expected part of the resignation process, it is far from an effective strategy for career advancement with the current employer.

Melissa Hook

About the Author: Melissa Hook, previously Director of Research for Columbia Consulting Group, recently started her own Baltimore-based firm, Avalon Consulting. She now provides research and other recruiting services to the executive search industry. Her search experience spans a variety of activities including project research, candidate recruiting and evaluation for clients in the manufacturing, insurance, pharmaceuticals, and financial services industries. Melissa's prior career experience spans nearly a decade in printing and publishing, including seven years with a mid-Atlantic book manufacturer. There, she served in a variety of management capacities, including Vice President of Operations. A graduate of the University of Maryland Baltimore County, Melissa received her MBA from the University of Baltimore.

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