When your top employee comes to you with a resignation letter, you may be inclined to offer more money to convince them to stay. You most likely do not have time to train someone new and definitely do not want your employee working for a competitor. However, because a counteroffer typically is a temporary answer to a long-term problem, you want to think twice before making one.

· Is Providing a Counteroffer an Automatic Reaction?

Are you extending a counteroffer as an emotional response rather than a logical response to a problem? Instead of panicking, slow down, take a deep breath, and ask yourself whether you want the employee to stay because of the value they bring to the company or because you do not want to be left with a vacant position. Let the employee know you want to keep them on your team. Set up a time to talk with them the next day, after you have given the situation some thought.

· How Would a Counteroffer Impact Your Team?

In most cases, catering to one employee with additional salary, vacation time or perks results in resentment and low morale among the other employees. Your team will notice when someone is spending more money, taking off more weeks than usual or benefitting in other ways.

· Will a Counteroffer Create an Unsustainable Precedent?

Would you be able to provide a counteroffer to every top employee who decides to leave? Because staff members talk, if you extend a counteroffer to one and they accept it, others will expect similar treatment in the future. Providing a significant pay raise just to retain one team member can upset your entire pay scale.

· Would a Counteroffer Address the Core Issues?

If you extend a counteroffer, will it address the real reasons why your star employee wants to leave? They may be looking to earn more money, but typically they are bored, do not get along well with their manager, lack a clear career path within your organization, or have another issue that is not being handled. Throwing money at the problem will not solve it. Also, because the employee already decided to change companies, they have ended their loyalty to your organization and broken your trust. Even if you provided a counteroffer, the employee most likely would leave within six months anyway.

· How Can You Overcome the Real Reasons for Wanting to Leave?

Talk with the employee about their true reasons for leaving, then think of ways to overcome them. For instance, point out the employee’s top contributions and ask why they are leaving. After hearing their explanation, mention you cannot make any guarantees but want to see whether you can offer similar income, perks, or opportunities for advancement. Mention that if the employee still chooses to leave, you will support their decision.

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