Beware of the Counter Offer!

Edit:  It’s been brought to my attention that “counter offer” might be interpreted many different ways.  Here’s the definition I’m using:  Someone gets an offer from another company, accepts that offer, resigns with current employer, current employer then provides “counter offer” trying to get that person to stay.

Counter Offers are more common now than I’ve seen in years. Why? Leverage swings back and forth between employers and candidates. Right now, it’s a candidate market. It is as hard as it’s been in years to find good talent. When someone resigns, many companies resort to counter offer tactics to buy more time. I am not one of those recruiters that will tell you to absolutely never under any circumstances accept a counter offer. Like any rule, there are exceptions. However, be careful what you sign up for. Here are 10 things to consider if you are presented with a counter offer:

Top 10 things to consider if you get a counter offer:

  1. Why did they wait until after you resigned to offer more money, perks or promotions?  In my view they should have appreciated your efforts and talent sooner or they don’t appreciate them at all. Neither feels real good, right?
  2. Is the counter offer genuine interest in specifically keeping you or are they selfishly concerned with their own situation? Their team is now short-staffed, it can take a while to find a replacement, who is going to do this work. Some companies go as far as making employees feel guilty for resigning. How could you do this to them, especially right now when it is soooo busy? Guess what, they will be fine.
  3. If business slows down and tough decisions need to be made, how will your resignation and then counter offer acceptance factor into their staffing decisions? At this point, loyalty is already a concern.
  4. Where is the increased money coming from? Your next raise? Or, will it even be paid…
  5. If they are promising more money and maybe even a promotion, is this coming in writing? Most counters are conversations full of promises with no formal obligation to see them through. I can’t tell you how many calls I’ve gotten a month after someone accepted a counter offer and nothing has changed.
  6. Why did you consider a new opportunity in the first place? In my experience, money should never be the only reason you’re looking for a new job unless you are significantly under paid. In either case, if it’s all about the money, ask for a raise before you leave. It is shocking how few people ask for raises.  I get it, it’s not a comfortable conversation. If done the right way, the worst they can say is no. At the very least your concern is on record and can be discussed again in the future. When people look for a new opportunity and ultimately find one, there are usually a variety of reasons beyond just money. Better hours, better boss, more career growth, closer to home, etc. Does a counter offer solve these problems?
  7. If you accept a counter offer and then in a year (if you are still there) are neck in neck with a co-worker for a promotion, do you think your resignation will come into play?  Yep.
  8. Loyalty is a great attribute. Don’t let it be a detriment. There is a good chance your boss takes calls from recruiters. Will he/she think twice if a great opportunity comes along? Will they consider how their departure will impact you when they’re making a decision on an opportunity? You should be fair and reasonable to your employer. But, at the end of the day, even your bosses are thinking about what is best for their own careers and families.
  9. Counter Offers are short-term fixes for both sides. It won’t fix why you were looking to leave in the first place. It gives an employer time to consider replacements. It keeps a boss from being temporarily short-staffed. It’s a band-aid. Statistics show you will likely be resigning again within the year if you aren’t replaced sooner.
  10. Lastly, the best companies don’t actually make counter offers. They don’t have to.  They have processes in place to review compensation and performance regularly. I know one company in Indianapolis specifically that has something called an “equity adjustment”. They regularly review employee salaries, compare to others in similar pay grades, compare performance reviews and make adjustments if needed. This especially helps in a case when someone is in the very bottom of a pay grade but outperforming their peers, peers that might be making more simply as function of time. (more annual raises, etc)

Counter offers can be flattering. I get that. Keep these 10 things in mind if you’re presented with one.

Have you been part of a counter offer situation, either receiving one or offering one? I would love to hear about it.

Hiring a new employee? This topic is important to you as well. There is often a quiet period between offer acceptance and first day of work. I will write a future entry about things you can do to help prevent your new hire from accepting a counter. This is one area a good recruiter can add value, as we keep in touch with placements during the transition period.

5 thoughts on “Beware of the Counter Offer!

  1. These are really good, Jon. There are times in my past where this advive would definitely have given me more confidence and leverage.

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