Counter Offer Considerations
Considerations When Navigating Counter Offers
Over the last two years, we’ve watched the job market shift in unprecedented ways. Due to the COVID-19 Pandemic, we experienced layoffs and hiring freezes across multiple industries in a matter of months. This left many unexpectedly unemployed and searching for a new opportunity. Months later, organizations adjusted, and the exact opposite happened. Companies began hiring again at an accelerated rate. This new job market has been challenging for both job seekers and employers. Competition is fierce; candidates are more selective than ever before, and companies are scrambling to retain their talent. As a job seeker courting a new opportunity in this competitive market, the probability of receiving a counter offer from your current employer is greater than ever. We’d like to discuss some considerations, and why you should be hesitant in accepting that counter offer.
A counter offer often gets presented when turning in a 2 weeks’ notice to an employer. If the employee is performing well in their job, their current company certainly does not want to lose them. Counter offers are very reactive in nature on the part of the company. Replacing an employee is timely and expensive. They often panic when thinking about the replacement costs to find new talent. It’s much easier in their mind, to offer a lucrative reason for staying. Offering a huge raise and/or extra PTO is an easy way out. It can be hard to turn down a lucrative counter offer, but there are many good reasons to do so.
You should think about the reasons a candidate enters the job market, and for simplicity purposes, were going to focus on three main reasons. Dissatisfied employees put themselves on the market when there is a problem with compensation, promotions, or they have a general issue with the company (i.e. job tasks, company culture, or industry problems). Only one of these three problems can be “solved” with a counter offer from your current employer, so we’ll start there.
An increase in compensation is a large motivator for many to enter the job market. If money is the sole purpose for looking for a change, a good place to start would be an honest conversation with your manager or HR department. If an employee is upfront about the issue, their current employer might increase their salary, which solves the problem right there. If not, it shouldn’t come as a surprise when they find their employee is leaving for another opportunity.
If the employee decides to first look at other opportunities due to compensation, they should be committed to leaving their current company. Once they turn in their notice or alert their current employer of this new opportunity, they may be faced with deciding to leave or considering a counter offer. Even if the counter offer is lucrative, some things must be considered. How is the management going to view this employee after they almost left the company? Are they going to see this employee as a potential flight risk? If something happens in the future that requires layoffs, this employee might be one of the first to go due to loyalty concerns.
The same issues arise when looking at other reasons for leaving. If one has an issue with the company culture, how does accepting a more money solve that problem? Sure, a $20,000 raise is great, but in three months that employee is going to be dealing with the same cultural issues that drove them to the market in the first place. The same is true to someone leaving for advancement opportunities. If one’s motivation is drawing them to bigger opportunities that their current employer cannot offer, it’s time for them to move on. They could be a critical part of their current team, and when they leave for a more advanced role, their current company may decide to throw them a huge raise to stay. Counter offers like this can be very hard to turn down, but one must keep their original motivations in mind. You may never get that promotion if you stay.
A great exercise is to write down one’s current motivations before starting a job search. List out the specific things about the current job that need improvement. One should visualize finding the perfect job that solves those problems; then one can think through specifically what they will say to their current employer if a counteroffer comes. This exercise leaves the candidate with a list of fact-based, non-emotional reasons for leaving their current job. Now, when the counter offer is brought out, this list can serve to remind one of their original intentions.
It can be both very exciting and stressful searching for a new career. There are many ups and downs, as well as hard lessons learned. One must be deliberate with their actions and intentions. Planning out ahead of time before emotions enter the mix can be a huge advantage. Lucrative counter offers create stressful decisions for many candidates, and this strategy can take the confusion and emotion out of the process. In the end, counter offers don’t change an original motivation for looking unless it’s purely financial. If it’s financial, does it make one wonder why they weren’t compensated for their work before they turned in notice? Something to think about!
