Offer a Raise to Keep a Good Employee

One of your employees comes to you with aBut offering a raise may buy you time to come up
resignation letter. You didn't expect it and you're blownwith a better long term solution. Can you solve the real
away. Visions of what's going to happen nextissue with the employee? Would a different job within
bombard you. You've going to have to hire and train ayour organization make them happy? Maybe they can
replacement, while keeping the job duties covered -work toward that goal over the next few months.
somehow. Assuming that this employee comes toHaving them in a different job at your organization
work for the next two weeks, they'll probably be gonemeans they're still available to train and fill in when the
before you interview your first candidate.need arises. And you have a say in when they move
Is there any way out of this mess? Can this befrom the current job.
undone? In spite of the standard wisdom that tells usEven if this employee isn't long for your company, you
that offering a raise to get employee to stay is not anow have time to start recruiting. Is there someone
good idea, the thought goes through all of our minds.else in your organization who could learn to do that
But is it really a bad idea?job? And no one needs to be threatened by your
History tells us that if an employee goes out jobcross training plan. It's obvious to the person who is
hunting, salary is not usually the primary reason. There'snow staying that you want them in the job. After all,
really something else. They want to do different work,you offered them an increase to stay. But at the
get promoted, work with different people. Thosesame time, you realized that they or any other
problems are not going to be solved for long with aemployee could leave at any time and you should
salary increase. Very often employees decide to stayhave a backup plan. If there are no suitable internal
and accept the increase. But within a few months, thecandidates, start collecting resumes, just in case. Jump
real reasons they went looking rear their heads again.on Linked In and start networking.
Plus now that their resume is out there, employers areThere are, however, some times when you should
calling them, unaware that they've made a decision toresist the urge to offer a raise to an employee who is
stay. They have one foot out the door and it's verygiving notice. If this is not a good employee or if a raise
difficult to get that foot back in and close the door.would make them overpaid, you are better off to deal
But take a step back a minute. The averagewith replacing them now. Don't prolong the problem, or
employee stays in a job about 2 years. That's anworse, give it an opportunity to become permanent. If
awful lot of recruiting and training, which means a bigthe company is considering layoffs and this person
productivity loss. If you can stretch that 2 years by amight be laid off, let them go now while they have
few months, that's worthwhile. It's certainly worth theanother offer. It's the right thing to do, and it will save
5% to 10% raise that you're going to offer theon your unemployment insurance.
employee. There's a good chance you're going to payEmployers haven't been in this position for a while, but
the new, untrained person that much anyway. And thein the next few months the job market will start
existing employee is already productive, and will be untilimproving and we'll have to face recruiting again. If you
the day they leave. I think it's worth even in thiscan keep the good employees you have, you're 10
situation, which we consider a failure.steps ahead.