What Is a Counter Offer, and Should You Accept One? - Herd Digital

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What Is a Counter Offer, and Should You Accept One?

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First of all, congratulations on your new job. You’ve put in hard work: updated your CV, applied to too many jobs to count, impressed the interviewer, and finally you’ve got your new job offer. 

And when you’ve handed in your letter of resignation, you can be confident in expecting a counter offer. As a recruitment agency, counter offers are something we see on a daily basis and discuss with everyone we work with. 

The Office for National Statistics (ONS) shows there were a record 1.29 million job openings between January and March this year. This demand for talent means you as an employee have more choice than ever when it comes to where to work. This in turn makes managers and employers that much more desperate to keep you, the employee. Which should make it no surprise that counter offers are becoming more commonplace and more aggressive.

Unfortunately, we find that by the time it comes to the counter offer, it’s too little too late. But before we get any further, let’s make it clear what a counter offer really is.

What is a Counter Offer?

A counter offer is an offer from your current (soon to be ex) employer to stop you leaving. 

They can be financial, such as a pay raise or a bonus: but it can also be a promise of a promotion, promise of training courses, different clients, the opportunity to hire someone to support you with your role, or more flexible working.

Counter offers don’t always happen when you resign. They sometimes happen when your employer spots a few red flags and senses your imminent departure: Last minute dentist appointments or early finishes.

While a counter offer may seem like your employer recognising your skills and not wanting to lose a valued member of the team, the truth is often less glamorous.

Why To Expect a Counter Offer From Your Current Employer

Obviously if you receive a counter offer it’s natural to assume it’s because you’re good at your job and your company doesn’t want you to leave. However, 80% of people who accept a counter offer end up leaving within the next six months anyway. Because counter offers very rarely address the real reasons you’re leaving in the first place.

And your employer knows this. Because they know statistically you will still leave within six months, a counter offer is a way of delaying your leaving and giving the company more time to find your replacement: You don’t become worth an extra £5,000 or £15,000 to your employer overnight. 

“Most likely, it is not because you’ve suddenly become a more valuable employee. It’s because your manager doesn’t want to deal with the work disruption your departure could create.”

Lisa Quast: Career Coach, Business Consultant

There’s a number of reasons why companies make counter offers:

  1. Firstly, it’s a business decision: It makes sense to pay someone more money on a temporary basis, while they find someone to do the job for a lower salary. At Herd we’ve spoken to people who accept counter offers with a big pay rise and the promise of more support. Then, the employer hires a junior under the guise of the promised support, trains them, and makes the senior person redundant and replaces them with the junior, who can now do the job at a much lower salary.
  1. Secondly, when you resign, your manager’s immediate reaction isn’t to think about how this is a great opportunity for you. They will likely be thinking of all the extra work they are going to have to do. They will need to speak to recruiters, review CVs, interview people after work, and train up your replacement. And your departure and the resulting loss in productivity could also have an effect on your manager’s bonus or promotion.
  1. Thirdly is time. It normally takes an agency around 1-3 months to find a new employee. That person will then have a 3 month notice period. It will likely take them at least 3 months to get to the point where they’re performing at your level. This means it’s going to take 7-9 months before the team is back to normal. During that time, the manager will likely have to cover two jobs and the rest of the team will become overworked and stretched.
  1. Which lead to our last reason, the risk of others following you out the door. When one person leaves a company, it’s not uncommon for other people to think the grass is greener and start looking for a new job themselves: And losing too many of the team means losing clients.

Should I Tell My New Employer About a Counter Offer?

Unless you’ve already declined the counter offer, we would advise to not say anything. 

Before you tell your new employer about your counter offer you should ask yourself, what are you aiming to get out of the conversation? Using a counter offer as leverage to negotiate a salary or more flexible working is something that we see from time to time here at Herd Digital: But it’s not something we advise. It can leave a sour taste and it doesn’t start your relationship with your new employer in a good light. 

However, If you’re working with an external recruitment agency, be honest and open with them. They will understand your situation and will be able to give you advice on how to handle the counter offer that’s specific to you.

Should I Accept a Counter Offer? 

No. If there’s a 1% chance you would accept a counter offer, don’t resign. Instead speak to your manager and have a frank and honest conversation; negotiate a pay rise, promotion, or whatever it is that needs to change to make you stay. 

But we also understand that nothing about starting a new job is easy. It’s a daunting prospect to uproot your life, say goodbye to colleagues you’ve worked with for years and put your faith into an unknown employer. So it can be all too easy to be tempted by a counter offer when one is on the table in front of you. But before you accept or reject a counter offer, there’s a few things you should consider:

Should I accept a Counter Offer? Six things to consider before accepting or rejecting your counter offer.

But if you are working with a recruiter, discuss your counter offer with them. No consultant wants to sour a relationship with a client by placing a candidate with them who leaves to go back to their old job after a couple of months. So it’s always in a recruiters best interest to give you honest advice and help you make the decision that’s right for you.

How To Decline a Counter Offer

The best thing to do is to make sure that when you resign, you explain that you’re leaving because you’re being offered something by another company that your current employer can’t match. 

This could be the opportunity to work with a specific client, getting experience in a new area, or a better location. This will also help to ensure your boss doesn’t have an emotional response or take it personally when you’re leaving. When you resign your boss is likely to ask you what they can do to keep you. It’s important at this point to politely say

Unfortunately my mind is made up, please respect my decision as I’ve enjoyed my time here and I’m keen to leave on good terms”.

It’s very likely that your employer won’t give up, and if you have a long notice period, you can receive multiple counter offers throughout that time. But it’s important to remember, you should never have to quit your job to be given what you want, to be paid the money you’re worth, or given the promotion you deserve. 

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