The Truth About Counteroffers
Written by: Greg Weiss
Counteroffers are a dime a dozen these days. As executive recruiters there is no better feeling than hearing the excitement when we call a candidate to extend them an offer on behalf of our clients; only to get our hearts broken a few days later when we get that call from the candidate to let us know they have accepted a counteroffer. Let’s take a look at two true stories about counteroffers. (Names have been changed to protect privacy.)
Case Study #1
Nicolas has been working as an HR Director for a large, global medical device manufacturing company for about two years. He’s given the job his all, but he’s becoming dissatisfied with the company culture—some organizational changes have altered his job responsibilities to the point where he no longer feels challenged or even particularly useful. He feels well-paid, but he’s no longer happy.
After looking around for a while, Nicolas interviewed with a smaller company that needs his skills and was even able to offer him a small raise. He’s excited at the prospect of being a “big fish in a small pond” and the learning and growth the new position promises. However, when he gave notice to his employer, they immediately proposed to pay him a bit more money than his prospective employer had offered because they were shorthanded and “couldn’t afford to lose him.”
Case Study #2
Amanda has been a senior vice president for a well-established local bank for 10 years. She has a loyal team, a large client base, and a great relationship with the rest of the executives. She enjoys the company culture and is happy with her work/life balance, but she feels a little underpaid.
After a short job search, she was offered a position with a much larger bank for significantly more pay. When she gave notice, though, her employers told her they simply couldn’t do without her and made her a counteroffer that exceeds the offer she accepted from their larger competitor.
In both cases, the employees have the potential to make more money if they accept the counteroffer. In the first case, Nicolas isn’t particularly happy with his job; money wasn’t the reason he looked to leave in the first place. In the second case, Amanda does enjoy her job, so money is the entire impetus for her prospective move.
What would you do if you were Nicolas? Amanda?
Sometimes counteroffers can seem attractive—they can gratify your pride and potentially pad your wallet. Another reason some employees choose to accept counter offers is that “the devil you know is better than the devil you don’t know.” In other words, they’re hesitant to leave their comfort zone and everything with which they’re familiar for a job where they might not succeed, especially when their current employer sweetens the pot to get them to stay. Fear of the unknown is a common human foible, and it can rear its scary head in this kind of situation.
However, before Nicolas or Amanda (or you!) grasp at the counteroffer straw their employers offer, they should consider the following truths and cautions.
Factors to Consider
You will change your boss’s perception of you. No matter how loyal and indispensable your higher-ups may have considered you before, their perception will change when you tell them you’re leaving (LinkedIn). Your loyalty will come into question for sure, and you will have planted the seed in their minds about if/how/when they could replace you.
Statistics are not in your favor. National statistics reveal that 89% of people who accept counter offers leave their employers within six months anyway. This almost-inevitable exodus could be because the reasons the employee wanted to leave in the first place (remember Nicolas) are never resolved. Or, perhaps their employers will choose to reward their “disloyalty” by placing them first on the chopping block during downsizing or layoffs.
You may be overlooked for future promotions/raises. If your employer offers you a promotion and/or a raise to get you to stay, chances are you’ll be passed over next time because a) they resent that you forced their hand, b) they feel like they’ve already done enough for you, or c) they see you as a flight risk and don’t want to invest any more in you than they already have. Although it may sound counterintuitive, you could actually stall your career progression by accepting that pay raise (see next point).
It may hurt your professional growth. Think back to Nicolas’ situation. If he lets the almighty dollar dictate his decision, he’ll be stuck in the same job that has started to feel like a dead end to him. Yes, it’s familiar, but that familiarity, for him, has started to breed contempt. Never let familiarity cloud your judgment. If the new role helps you grow in your career or take a step forward then, by all means, accept the new job. Familiarity will come soon afterward.
The truth is, as we’ve seen, every situation is different. The context will determine whether a company makes a counteroffer and whether an employee accepts it. However, both parties will be much better off if they consider all of the facts before making a decision. To that end, check out the following telling counteroffer statistics.
This article first appeared in The Truth About Counteroffers.
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ABOUT THE AUTHOR
Greg authored 3 practical Career Books, and 1 Book helping Visionary leaders scale their businesses. He is one of Australia’s most experienced HR consultants and leading career coaches. He is the founder and owner of Soulidify and Career365. As an entrepreneur/business owner, Greg has experienced first-hand the joys and frustrations of starting and growing one’s own business.