As a legal manager, I’m tempted to make counteroffers. Any advice on whether this strategy is effective?

With the legal job market improving, we’re seeing an increase in the number of employees giving notice for better pay or circumstances. As a legal manager, I’m tempted to make counteroffers. Any advice on whether this strategy is effective?

When a valued team member gives notice, your first impulse may be to counteroffer. But before you start trying to cut a deal, give careful thought to these three potential drawbacks of making a counteroffer:

It may not address the underlying problem. Although the employee may indicate that the other offer is too lucrative to turn down, the resignation may not be solely about the money. There could be other core reasons at play -- perceived lack of advancement potential or personality conflicts. Also, even if you’re able to sway the person with the promise of a larger salary or better title, it may just be a stopgap measure — one that still won’t ensure long-term retention or job satisfaction.

It can negatively affect office relationships. Once an employee comes to you to tender his or her resignation, it’s hard to put the genie back in the bottle. You may feel dismayed that a once-committed employee pursued another opportunity without your knowledge, and this can lead to lingering questions about the person’s loyalty and commitment going forward. Employees with one foot out the door may wonder why it took a bid from another firm to prompt an offer of what they felt they deserved all along. Further, if other staff members get wind of the fact that enticements were given to keep a fellow employee —and, somehow, they always do — they may feel like they’re being penalized fornot threatening to leave. This can cause morale problems in the office, undercut teamwork, precipitate the need to address pay and promotion schedules for others in the office, or suggest that you’re open to manipulation.

It may not be warranted. A counteroffer is often a reflexive move. As a manager, you may see a series of case deadlines looming and can’t fathom finding the time to recruit and prepare a replacement for a productive employee. But is the person so irreplaceable that you must resort to a counteroffer, especially when the employee has indicated a readiness to leave? If you take a longer view, you may find that the costs of retaining the employee are not worth the risks or office backlash that could occur.

The best approach, however, is to avoid the need to counteroffer altogether. If you keep an open line of communication with your team members and encourage them to be honest with you about their career and financial goals, you’re more likely to be able to take proactive steps to retain valued employees before they grow dissatisfied.