Employers often tend to make counteroffer when an employee is about to leave the company. Anyway, the counteroffer is very tricky. This acts as a ‘quick fix’ but does not work for a long-term retention.
Although counteroffer helps you to retain a potential employee, it may lead to other disadvantages. The major drawback is, it may demoralize other employees. They may have a thought like “So this is how I get a rise or promotion?!”. Another drawback is this may raise the ego of the person receiving the counteroffer.
However, there are advantages like saving the time and money spent to hire and train a new professional.
Review the performance of the employee and make the counteroffer if the person is potential enough to be retained. The counteroffer need not be monetary but even a new career path for the employee with more challenges. Analyze the reasons behind the exit of an employee and try to solve the problems. This may serve the long-term strategy to retain employees.