WHAT TO CONSIDER WHEN A COUNTER OFFER COMES YOUR WAY

You’ve accepted a new job, handed in your resignation and started thinking about your leaving speech. But what do you do when your current employer makes a counter offer? An enticement to stay that can be financial, a promise to change things about your role, a promotion or all three.

THINK CAREFULLY AND CONSIDER ALL THE FACTORS WHEN CONSIDERING A COUNTER OFFER

It sounds like a great position to be in, but deciding whether to accept a counter offer can be tricky. Use our guide to help make the right decision.

WHY ARE YOU BEING MADE A COUNTER OFFER?

There are times when a manager has genuinely failed to notice you’re ready to leave. In which case, they might be surprised by your resignation and make a genuine offer to try and retain you. But more often than not a counter offer is a kneejerk reaction to losing someone they’re not ready to replace.

It costs around a third of an employee’s annual salary to replace them, add in the loss of productivity, knowledge and damage to staff morale and it’s a lot more. By comparison the cost of a financially-based counter offer is likely to be a lot smaller. Your manager may also want to buy themselves some time to begin the process of finding your replacement, or they might simply not want the bother of finding a new hire.

It’s also worth remembering, some people managers are measured against staff retention and engagement targets – they may need you to stick around a little bit longer to help meet their key performance indicators. So no matter how flattered you are, bear in mind your manager could just be creating a situation where they can replace you when it suits them.

GOOD EMPLOYERS DON’T USUALLY MAKE COUNTER OFFERS

There are reasons you have sought and found a new job. And you should ask yourself why your employer hasn’t tried to address them. You need to question why your manager is offering you what you want now, and consider whether their promises will materialize.

A good people manager will know if you are unhappy or at risk of leaving, because they’ll have been having regular career development conversations with you and giving you ongoing support to address any issues.

Good managers expect some of their employees to leave at some point – that’s just the nature of the game. Yes, it’s inconvenient and they’ll be disappointed to see a top performer leave, but if no one moves roles opportunities for growth and development stagnate.

WHAT ELSE SHOULD YOU CONSIDER?

Here are some tips to help you navigate a counter offer:

• If you won’t consider one, say so. When you resign save your company the time and effort of coming up with a counter offer by telling them that you definitely wouldn’t accept one.
• Know what you are worth in the market, especially if you were hoping for a counter offer. If you are highly specialized, or possess deep client relationships that might be lost when you leave, you are in a strong negotiating position. But seeking an external role in order to provoke a counter offer from your current employer is a risky strategy and not one we would recommend. If you have the time and energy to secure a job offer elsewhere we’d suggest using some of that to start meaningful conversations with your current employer first.
• Counter offers are flattering if you weren’t expecting one. But, as we’ve mentioned, be wary. All HR professionals will tell you they’re fraught with danger – if you have to resign to force the change you want, is it a company you want to work for full stop? Nine times out of ten a counter offer won’t solve the deep-rooted issues you have.
• Resigning shows your hand. Even if you decide to accept a counter offer and stay on, your employer knows you are a flight risk and may question your loyalty, which could negatively affect your career progression.
• Consider your personal brand. If you renege on an offer from another company it’s unlikely they’ll consider you in future. Not only will they have to start the recruitment process all over again, they’ll mark you down as indecisive or, worse, money motivated and opportunistic.
• And prepare to have a difficult conversation with the company you are reneging on, if you accept a counter offer. Do your best not to burn any bridges – be clear, concise and extremely polite. Thank them for the time they have invested in you and give them a tangible reason for your decision. But don’t let the prospect of an awkward conversation put you off doing what is right for you.
• Don’t start a bidding war. You’ll end up wasting one company’s time and you’ll damage your professional reputation while you’re at it. If you receive a counter offer, you should quickly decide which to accept and let all parties know the outcome, rather than use it to start a negotiation.
• A counter offer is rarely a win-win situation. It’s possible the reasons you are leaving are temporary and reparable. Perhaps your old manager promised you something which wasn’t conveyed to your new manager; maybe a salary increase has been overlooked during a corporate restructure or perhaps the company has been sold and the new leadership has reviewed your situation. All of these scenarios may genuinely lead to a solid counter offer that works for everyone. But they are rare and you still need to be sure the role suits your skills and values, and that accepting is the best move for your career.
• A salary rise has to come from somewhere. HR departments usually operate with strict budgets, if your manager is dipping into that to fund a counter offer before the end of the annual performance cycle, it may impact how you are rewarded down the line. Your bonus might be less than was planned or your salary increase below what you expected.
• Be polite when declining a counter offer from your employer. Thank them but let them know you’re sticking to your original decision to resign. You can explain why, but you don’t have to. Most managers will respect your decision, admire your integrity and wish you success.

As you’ve probably noticed there’s a theme running through this guide: accepting a counter offer is a risky business. They’re usually designed to benefit your employer, not you, so tread carefully and consider all the outcomes before agreeing to one.

FIVE THINGS TO REMEMBER:

• Do what is right for you, not the company.
• When resigning be clear if you will not consider a counter offer.
• Accepting a counter offer can erode trust and loyalty.
• You’re leaving for a reason. Don’t get sidetracked.

Do not use a counter offer to start a bidding war.