How to deal with a counteroffer

How to deal with a counteroffer

Accepting a new job offer is an exciting experience. At the point where you know you’ll be leaving your old job and moving on to pastures new, a whole new world of possibilities opens up. But then, to burst your bubble, your boss offers you more money or a better package to stay.

“We can’t afford to lose you!” they say. Now, what do you do?

On the one hand… shiny new job and a whole new adventure.

On the other hand… a job you’re comfortable with and colleagues that you probably like.

Here’s what you need to do when considering a counteroffer.

Write down all the reasons you wanted to leave your job

Let’s face it, it’s likely that you didn’t decide to leave your job on a whim. You probably thought long and hard about whether or not applying for a new role was the right decision, and then, weighing up the pros and cons, you went out and secured something new.

At the point of a counteroffer, it’s important to remember all of the reasons that you wanted to seek employment elsewhere.

According to a Harris Poll, as reported by Business Insider, lack of career growth is one of the most common reasons that workers leave their jobs, second only to low pay. Other common considerations are:

  • You want/need more money than your employer is prepared to pay
  • You want/need a more flexible working environment than your employer is prepared to offer
  • You have a personality clash with your boss/colleagues and your working environment has become toxic
  • You want to work for a company with better/more sustainable working practices
  • You want to change industry sector completely

Whatever your reasons, the practice of writing them all down will help you to clarify the things that you really want.

Analyse why your employer is putting a counteroffer on the table

Oftentimes, employers will only put forward a counteroffer to tempt you to stay either just before you resign, or just after. A bit like those companies who layout a buffet of offers that are open to ‘new customers only’, and completely forget about those that have remained loyal for years. A counteroffer can be flattering and completely devastating in equal measure.

Employers will often put a counteroffer on the table when:

  • You are genuinely excellent at your job and it will be very hard to replace you (remember though: no-one is truly indispensable)
  • The cost of training someone else to do your job is significantly greater than the cost of keeping you
  • They have a small talent pool to choose from
  • They have a small hiring budget
  • Losing you could cause them greater reputational risk, especially if the company already suffers a high staff turnover
  • They actually really like you and just want you to stay

Remember that your employer operates a commercial business, so unless you are one of the nicest people in the world, it’s unlikely that this last bullet point really stacks up.

Also, remember that it has taken your resignation to spur your employer into action. What might have happened if you hadn’t found a new job? Would your current employer have still taken it upon themselves to offer you something more?

Ask yourself if the counteroffer offsets the reasons you wanted to leave

It’s truth time. The happiness of your future working life is at stake. It’s time to revisit your list of reasons for wanting to leave and ask yourself the serious question: does the counteroffer negate these reasons.

  • If you wanted more money, is more money now on the table?
  • If you wanted a more flexible working environment, or a better work/life balance, is this being offered to suit your needs?
  • Will the personality clash be resolved? Are you being given the opportunity to move to a different area of the business?
  • Are you being offered the chance to undertake training, or improve your promotional prospects at work?
  • How does the counteroffer compare to the package on the table from your new job?

And, most importantly, will staying with your current employer make you happy in the long term? Or, will it just ‘do for now’, with the need to find a new role in a few months time.

Think about what will happen if you stay

Accepting a counteroffer is never a decision to be taken lightly but few people think beyond their immediate needs.

Consider this scenario.

Duncan has been employed as a maintenance engineer with his current company for three years. But Duncan is feeling unsettled. Although he loves the family firm he works for, he knows he’s not being paid the market rate and his boss would have to leave or die for Duncan to ever move up the career ladder. Duncan has three young children and partner to support, and by his own admission, he’s an ambitious guy.

So, Duncan goes out and finds a new role. He’s offered an additional £5K on top of what he makes now, bringing him in line with salary benchmarks for his industry. The new company also offers him a training allowance and the chance for promotion to a more senior role inside of two years.

Duncan accepts the offer. He then hands in his notice, but his current boss immediately offers to match the new salary, if he stays.

The trouble is, Duncan really does love the company he works for, but his gut instinct is telling him that there is no future there. Duncan could (and should!) negotiate his counteroffer, and probably squeeze a little more out of his current company. If he stays, he could gain a nice pay rise, but ultimately, will it resolve the issues of Duncan’s career ambition?

Additionally, Duncan would need to consider:

  • How his colleagues will now feel about him. Will they resent him for getting special treatment? Will his manager know that Duncan has designs on their job?
  • How will Duncan be positioning in the industry, especially locally? Will the other company wonder if Duncan only used them as a negotiating tool? Will it limit his future employment prospects?
  • Has he already outed himself as a flight risk? Will his company now be keeping close tabs on him and a feel a little less trusting?
  • Does his current employer really want him to stay, or is the cost of replacing him just too great? Is this Duncan’s problem? (Hint: the answer is no).

How to accept a counteroffer

The truth of the matter is, accepting a counteroffer rarely works out. Statistics show that a whopping 80% of candidates who accept a counteroffer end up leaving their current employer within six months, and 9 out 10 leave within 12 months.

However, if you decide that actually, you are better off where you are, especially with the new package on the table, then it’s time to accept the counteroffer.

Firstly, make sure the entire deal is in writing. The last thing you need is for your employer to go back on their word once you’ve agreed to stay.

Secondly, it is imperative to your professional reputation that you let the other company know as soon as you’ve made your decision. You should do this in person or with a phone call and speak directly to the hiring manager.

Be truthful. Explain that you’ve accepted a counteroffer but would very much like to thank them for their time and attention during the recruitment process. Then, follow this up with an email to confirm that, sadly, you won’t be joining their business.

How to turn down a counteroffer

Turning down a counteroffer is a similar process to accepting one but in reverse. Speak to your employer first, by phone or in-person and tell them that although you really appreciate the offer, your resignation still stands and that you’d love to leave on good terms.

Leaving your employer on good terms means that they are more likely to offer a good employment reference and may leave the door open for you to return, should things not work out with your new role.

As a gesture of goodwill, you could also offer to help with the recruitment of your replacement or suggest someone else from the industry that will be a good fit for your job.

The truth is, Demob Job, like most professional recruiters, have seen our fair share of candidates battling with the counteroffer scenario. And, our advice is that unless your decision is purely financial, the counteroffer trap is best avoided at all costs.