In today’s market, we’re seeing a rise in counter offers not seen in the recent past. If you aren’t sure how to respond to these, don’t worry! We’ve put together a comprehensive guide that can help you reach the best decision.
What is a Counter Offer?
Counter offers were primarily a phenomenon of the past until recently. Many employees are leaving their current employers in search of better opportunities, and companies understand the impact of losing talented employees.
In an effort to keep employees, companies may provide counter offers. These are typically given within a week of receiving an employee’s notice to quit. Counter offers may take the form of:
- Better salary
- More benefits
- Additional responsibilities
- More job flexibility
- A role change
Counter offers occur the most frequently in markets where demand outstrips supply, such as tech and engineering.
According to UK Recruiter, 50% of employees who resign will receive a counter offer, whereas 38% of hiring managers stated they’d never made a counter offer. A whopping 57% of employees accept counter offers.
Why Do Employers Make Counter Offers?
Particularly in industries where demand for excellent talent exceeds supply, employers are motivated to keep their current employees. Further, typical turnover costs are estimated to be anywhere from tens of thousands to 1.5 – 2 times the employee’s annual salary. Losing a talented employee is a blow on multiple fronts to the company.
Here are some other reasons why a company may be motivated to provide a counter offer:
- Absence of time for recruiting a replacement
- Avoiding increased workload for other team members
- Maintaining team building and relationships
- Buying time until finding a replacement
- Needing an employee to complete a critical project
There are many reasons why an employer may give you a counter offer, but should you take it?
Reasons to Accept or Decline Your Counter Offer
Lots of things will race through your head when a counter offer lands in your lap. We’ll walk you through some reasons to accept or decline.
There are a few reasons why you may want to accept a counter offer, including:
- You’re familiar with the company, environment, and people.
- A counter offer means the decision-makers value your worth. You won’t need to prove yourself all over again at a new company.
- The offer gives you exactly what you want.
- You prefer the terms of your current job more than the new one.
- There’s a lot of uncertainty with a new job. What if you hate your work or team?
There are a few reasons why you’d want to accept a counter offer, but first, consider the reasons why you might decline.
Here are some reasons why it may be a smart idea to pass on that counter offer:
- Your employer will likely begin looking for a replacement immediately, one who they can pay less.
- Your loyalty is in question. You went as far as to accept another job informally, so what stops you from doing it again?
- When times are tough, employers are likely to let you go first, as your loyalty is in question.
- 80% of candidates who take counter offers leave within 6 months.
- What does all this say about current company culture? Are you okay working for a company that required a job offer from another organization before they’d give you the benefits you wanted?
- You may be more likely to be passed up for promotion.
The reasons to decline a counter offer are not insignificant. Take the time to go over these lists thoroughly, and weigh your counter offer carefully. Unless you have a particularly strong relationship with your current company, we’d recommend not taking the counter offer given the potential downsides that come with it.
7 Questions to Ask Before Accepting That Offer
When it comes time to weigh a counter offer, you need to step back and evaluate your career more generally. Here are some questions to ask yourself that will help guide you towards the right decision:
- What changes if you accept the counter offer? Are the main reasons you began job hunting in the first place going to be eradicated?
- Would the bonuses you’re receiving be enough to overlook other issues you have with the company?
- What’s there to gain if you accept the new offer?
- Which job is closer to that of your dream role?
- Which job brings you closer to your short- and long-term career goals?
- What do you value in a job, and which offer best matches that?
- Is your current company/boss aware of these goals, and are they supporting them?
Think carefully about both offers more broadly, and compare those to your long-term career goals and dream job aspirations.
If you aren’t sure what your goals are, now’s the time to figure it out. Here’s a guide that can help you get started. Map out short-, medium-, and long-term career goals with building blocks to get you to each one; evaluate which job furthers those goals.
Counter Offer Best-Practices
Maintaining proper etiquette is essential throughout all points in your career. Even if you’re considering leaving your current company, you want to maintain professionalism and avoid burning bridges.
Always maintain your honesty. Never lie about external job offers or make up inflated salaries. If word gets out that you’re lying, your reputation may be permanently damaged, and you’ll struggle to receive any offers for a while.
Ideally, before you start searching for another job, you first want to talk it over with your current employer. This gives them a chance to respond and meet your demands; you can also use this time to discuss issues you’re facing in your current role.
However, if your boss doesn’t feel the need to hear you out or consider your concerns, this would be the time to begin job hunting. Once you have a solid offer in hand, approach your manager again and use that as leverage.
Navigating the world of counter offers can feel intimidating. It’s gratifying to know you’re sought after by two companies, but which one should you stick with?
Remember to weigh your considerations carefully and maintain your professionalism the whole time. If you do these two things, you’ll end up with the best outcome.