Knowledge & Insight

Counteroffers - accept at your peril

Mon 5 February 2018

There's no doubt about it, the confirmation of a new job offer can be one of the most satisfying feelings in the world. You've been selected from all the other candidates to take on a challenging new role that comes complete with a great salary and a range of attractive benefits. It's all you could wish for! So you break the "bad news" to your boss, and the next day he comes back to you with a counteroffer. Suddenly things don't seem so clear-cut. Perhaps you should stay in your existing role? It's a pretty good position, you know your way around the place, you're comfortable, safe, secure. Maybe a new job isn't such a good idea. And with a nice counteroffer on the table, maybe it makes sense to stay put?

Offer versus counteroffer

This is a very common scenario, yet however "offer" and "counteroffer" stack up against each other, our advice is always the same. Don't reconsider. Don't accept the counteroffer. Push on with the new opportunity. This advice is based on years of experience and first-hand knowledge of many instances where accepting a counteroffer didn't turn out as planned for either party. We're not saying there's never been a case where it's been appropriate to accept a counteroffer, but in our experience it's very, very rare.

We use the term "counteroffer" to describe an employer's response to your stated intention to leave the company and take up a position with another firm. We're not talking about responses to informal discussions concerning approaches you've had from other companies (those little tactics frequently used to remind your bosses how valuable you are). We're talking about genuine offers confirmed in writing, and the counteroffer is your employer's response to tempt you to stay.

The poisoned chalice

A juicy counteroffer can be very tempting, but we strongly recommend you resist temptation, and here's why. Firstly, examine your manager's motives. Why do they want you to stay?

  • They rely heavily on you, and they'll suffer when you're gone.
  • The department is already stretched to capacity. What will happen if you leave?
  • They need to keep you in place until they can find a good replacement.

Each of these concerns is centred around your boss's welfare, not your own, and quite naturally they will be worried about how your departure will impact upon them. How will it look if they lose a good member of the team? How will it affect their performance? How will they manage without you? So any incentives to stay may not actually be offered with your best interests at heart.

Let's talk about this

Counteroffers can be pitched in a variety of ways, from, "we have big plans for you but we couldn't share them with you until everything was in place…" to "I thought you were happy in your role. What can I do to make you reconsider? Let's talk about this…"

But again, the motives behind these actions won't necessarily be focused on you. Your leaving will inevitably have downside consequences for your boss, not just operationally but on other levels too. Your departure will ultimately reflect on their abilities as a manager - were they unwilling to delegate sufficient responsibility? Did they not recognize and reward you sufficiently? What did they do to make you want to leave? These are all questions any manager would wish to avoid, so it's likely they'll try a variety of things to make you change your mind.

They might tell you how greatly valued you are, how much more they'll pay you, new areas of responsibility they'll give you. And unless you're utterly miserable in your work, these promises can appear very attractive, and all come without the risk associated with a move to a new company. But once you've stated your intention to leave, the risk of staying can be even greater.

The downside of accepting a counteroffer

Taking up a new role always brings risks. But once you've declared your intention to leave, so does remaining in your existing role.

  • Once you've stated your intention to leave you will always be considered a "flight risk", which means your loyalty will for ever be in question and you will be excluded from the company's "circle of trust".
  • What is the real motivation behind the counteroffer? To induce you to stay for the long-term? Or to put effective succession planning into place so your leaving won't have such a negative impact?
  • If you're valued so highly, why didn't your employer take a more proactive approach and offer these new elements before? Will you have to threaten to leave every time you want to negotiate conditions?
  • Well-managed companies aren't in the business of making counteroffers. They reward employees at a level that's consistent with market rates and the value the individual adds to the company. If they've been underpaying you, this reflects poorly on their commitment to looking after your career and your welfare. If they've not been underpaying you, an enhanced package must represent an overpayment in relation to market rates, and it's unlikely an employer will wish to sustain that in the long-term.

To stay, or not to stay?

Although counteroffers can appear both lucrative and attractive and can give you a warm feeling that comes from being truly valued by your employers, you should always consider the motives that lie behind the offer. Are your employers focused on what's best for you, or what's best for them? If the reason behind the counteroffer is to protect the best interests of the company and/or your boss rather than your own best interests, then you should reject the counteroffer and set your sights firmly on the road ahead. And don't look back.

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