For those unfamiliar with the basic definition; the counter offer is a last-minute bid by a company to retain an employee who has handed in a notice of resignation.
Over the years we have seen many a counter offer put on the table from frantic employers and in this article, we are going to cover both the positives and negatives of accepting; whilst shining some light on the subject.
And In the famous words of The Clash, “Should I stay or should I go now?”
What is a counter offer?
A counter offer is an attempt to entice an employee to stay with their employer after they have received an offer for another job position. The counter offer can consist of a raise to salary, an increased benefits package (company car, bonus, etc.), a promotion or new role within the company or just a few words of reassurance and promises of a brighter future. This is done in the hope that this increased ‘deal’ will change the employee’s mind and get them to stay.
Pros of Accepting a Counter Offer
• The most straight forward counter offer is financial and this tends to benefit employees who are generally happy with their job but feel they are being financially undervalued. This can be resolved by their employer increasing the employee’s annual salary or some of the other financial benefits.
• If the dissatisfaction runs deeper and is widely felt then a benefit of a long-term, highly regarded employee resigning their post is that it can give a wakeup call to their employer which can lead to change that, not only benefits the individual, but also the overall team. Whilst no one person is bigger than a company, losing key staff can be very disruptive and costly so making a few changes to improve the general feeling can be a benefit to both employer and the team.
• Where the issue goes beyond finance and self-worth then the employee may be looking for more responsibility and a new challenge. When recruiting, the natural tendency for many employers is to look outside whilst overlooking existing staff who may have transferable skills. A resignation could, therefore, start talks regarding a step up or it could open doors to new responsibilities whilst putting plans in place for further career progression. This can leave the employee in a better position, knowing that their aspirations are being considered and that there is potential to progress within the company.
Cons of Accepting a Counter Offer
• Financial gain tends to be short-lived once the shine of an increased salary wears off and the extra money has been absorbed into our daily living. Once this happens the other reasons for our dissatisfaction starts to resurface and it’s only a matter of time before we are scrolling through the job advertisements again. Statistically, over 70% of people who accept a financial counter offer start looking for a new job within six months either because of their renewed unease or (in recessionary times) an unexpected redundancy notice.
• However well regarded an employee is, they are rarely viewed the same by an employer after a counter offer, who may now feel let-down at having been put in that position; and who may forever question the employee’s loyalty. This often shows up when salary reviews, bonus payments and promotions come up; or when cut backs in the company occur.
• Beware the promise of a brighter future that comes in the form of a promotion or new role ‘in six months’ time’ or ‘once your current project completes’. Talk is cheap and often the promise of change simply buys the employer time to plan for the employee’s departure and line up a replacement.
• Even if a pay increase or promotion IS forthcoming then consider why it has only been offered in a last-minute bid to stop you from leaving rather than in authentic and planned recognition of your value to them. If your employer knew about your concerns or wanted to improve your circumstances then why did they leave it to such a late stage, and will it take another resignation to get that next increase? Similarly, how will your colleagues feel towards you knowing that you strong-armed your position?
• For me, the biggest downside is often overlooked. To get to the resignation stage, it’s likely that you invested time in finding and interviewing for a position that you wanted, with a company that you liked; and to whom you suggested (at least verbally) that you would be accepting their offer. Companies rarely enjoy feeling as though their offers have been used and often disregard future applications from those that have ‘let them down’.
There are always pros and cons to decisions and sometimes a counter offer can occasionally be a great opportunity for change while often it’s a quick fix for 6 months before the original feelings return even stronger and it’s back to square one