Counter Offer

What is a counter offer? In the context of this article, we are discussing the receipt of a counter offer made by your current employer in a (sometimes) desperate attempt to keep you from resigning. 

In our recruiting world, we categorize job seekers into two types: the Actively Searching and the Passively Searching. While the Passively Searching are those who are fairly content but always open to considering new options, the Actively Searching are likely looking for a new position because they are either unemployed or unhappily employed.  

The Unhappily Employed

We have all been there. Before my IBM days I worked as a CAD specialist for a manufacturing company in North Carolina. At first I found the job challenging, but after a couple of years, it became monotonous…and I wanted more.  I wanted to quit, but my Dad’s voice was always in my head, telling me to ‘always have a new job before leaving an old job.’

There are many reasons individuals consider new positions while still gainfully employed. In my case I was bored and didn’t see an opportunity for advancement. While no job will be perfect, it sometimes makes sense to look for something new; and if you are one of those people searching for a job when you have a job, then you know what a challenge this can be.  

The Underlying Issue

Deciding to leave a job can be a tough decision. My advice? Write down the reasons that are causing you to consider leaving that position. In fact, it makes sense to create a holistic love/hate list that outlines all the wonderful, as well as not so great, characteristics of your current position. 

Not only will this exercise help you be sure you are making the right decision to leave, it will also help you to define the characteristics of your new position before you start the job search. 

The Decision to Move On

You have signed a new contract and confirmed a start date for your new job.  How exciting!! The next step is to tell your boss that you are leaving. Seems simple, doesn’t it?  But when you tell your leadership you are leaving, they surprise you with a counteroffer. Should you stay? Or should you go? 

Being Flattered by the Counter Offer

Statistics will tell you that few people leave because of compensation…they typically leave because they feel they aren’t valued or there isn’t an opportunity to progress their career. Employees who have made the decision to terminate their employment often feel frustrated, demotivated, misunderstood and underappreciated. Making a decision to quit is an emotional task, as most individuals are simply looking for appreciation or a life change. 

This is why counter offers can be quite seductive, because it offers you the time and attention from your manager that you feel you deserve or have been craving.  With that being said, you may feel the counter offer is flattering; however, from where I sit (as a hiring manager and recruiter for over 20 years) most of the people I have known to accept counter offers have eventually regretted their decisions. Here is why. 

The Underlying Issue Isn’t Solved

Think about the love/hate exercise you did which clarified the reason you decided to leave in the first place. Then, think about why you are receiving that counteroffer…what is motivating your manager to give you what you are looking for now?  

Why is the increase in salary, educational reimbursement request, or that promotion you feel you deserve an option now when it wasn’t 30 minutes ago?  While your current employer may be trying to retain top talent, you also have to consider that perhaps your current employer is really just trying to protect himself and the company. Did you know that according to Gallup, the average cost of replacing an individual employee is conservatively estimated to be 150% of their annual salary? 

Meaning, the counter offer is more about taking care of the company and management and less about taking care of you. Attrition costs companies money and when people leave, their managers look bad.

Unless compensation was the only reason you were considering leaving, don’t let a counter offer that only increases your salary sway you to stay. Focus on the underlying reasons that led you to the original decision to leave and assess if the counteroffer has resolved them.

Your Loyalty Will be Questioned

Once you have threatened to quit, you have clearly shown your dissatisfaction with your position, the team, the company, or the compensation.  Even if your reasons for wanting to leave are temporarily resolved (such as an increase in salary), your employer will feel it is only a matter of time before you threaten to leave again. The net? You have just made yourself a liability to your company!

And research confirms this. One particular survey showed that 70-80% of those who accepted a counter offer either left or were let go within a year. 

The Maturity of the Company

And most importantly, companies who are operationally and strategically mature will rarely present a counter offer. Mature companies know they provide a competitive salary because they do the research to confirm you are being paid at or above industry average. These companies know they provide a career path for you because they have a robust career development program. Management also knows if you are happy in your role or are dissatisfied in any way with the position, your development, the support of the team or the overall culture because they ask you…regularly. 

The reality of it is that organizations who have a plan in place to retain and incent their top talent as well as processes in place to confirm the team members are happy with their environment will not need to present counter offers.

How to Decline a Counteroffer from Your Current Employer

Now, I know “never” is a pretty strong word and I will admit a small percentage of folks who accept counter offers have positive outcomes, but I would like for you to think about the risks before you are put into this type of situation.  

Know what you want, know what you are willing to accept, and stick to your goals. If you decide that it is in your best interest to decline the counteroffer, you will want to do it in a way that avoids burning bridges with both your manager and the company. 

I feel it is useful to be gracious. Show appreciation for the offer while being clear that you have already committed to the new role. I also feel it is useful to have a real discussion with your manager at some point. I do want to note that you may need to wait until the dust settles (especially if your supervisor is upset). But letting your supervisor know the details of your love/hate exercise, thus the true reasons behind why you decided to leave, will give that supervisor an opportunity to address any issues that need to be resolved within their organization. 

Need Help to Find a New Opportunity?

Not sure if you should stay in your current role? We navigate these kinds of situations every day, ensuring both client and consultant are supported for the highest good of all involved. Do feel free to contact us if we can assist in your decision-making while finding, or maintaining, the perfect fit for you. We will always maintain your confidentiality and are happy to help. 

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