Why You Should Never Accept a Counter Offer

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June 2019

Written by Adam Richardson (adam.richardson@arresourcing.com), Managing Director and Owner of AR Resourcing. Adam has 20 years’ experience recruiting professional and technical disciplines across the built environment industries.

The excitement of a new job offer is often tinged by a slight angst that comes from taking a leap into the unknown. And your employer is very likely to try to play on that insecurity to stop you leaving. In fact, 50% of employees receive counter offers but the reality is these counter offers almost never work out for the employee – but that doesn’t matter for the employer as discussed below.

We recently reviewed the progress of all of our candidates who accepted a counter offer in the past 3 years and 68% left their current role within 6 months of accepting a counter offer. This is actually better than a national survey that found 80% who accept leave within 6 months and 90% within a year.

WHAT AN EMPLOYER’S THINKING WHEN AN EMPLOYEE RESIGNS

The moment a team member resigns, their employer will be thinking they have fewer than six months to succession plan. Even if their intentions are to support that employee’s career going forward it would be short-sighted not to plan for continuity in case that employee is one of the 80% who will leave within six months. Imagine the conversation with their boss: “4 of 5 employees leave after a counter offer – why did you not prepare?”

Once those preparations are in place the employee who received the counter-offer is an expendable cost – the organisation has prepared for life without them after all. Not only that but given the employee has put a metaphorical gun to the employer’s head trust is gone – between the employee and management and between the employee and their peers who may begrudge any promotion, pay rise etc.

HOW EMPLOYERS REACT TO RESIGNATIONS

Bosses typically throw everything at an employee to keep them in the short term: salary increases, improved benefits, greater flexibility, career progression, etc, and will simultaneously try a combination of emotional blackmail and flattery. An employee leaving means they will need to recruit a replacement (expensive and time-consuming) and find a way to cover that individual’s job until the replacement is up to speed. The chances are that in spite of everyone working harder productivity will drop at least temporarily. In the short term, the organisation will likely suffer, and the manager will look bad.

WHY DO 90% OF EMPLOYEES LEAVE WITHIN 12 MONTHS OF ACCEPTING A COUNTER-OFFER

The amount of money the existing employer normally offers is rarely life-changing and it is rare that the fundamental issues that made the employee look for a new job in the first place have changed. In fact, many candidates find themselves becoming increasingly resentful of their employer after accepting a counteroffer as they feel “bought” and wonder what might have been.

That resentment can quickly escalate as promises of promotions, pay rises etc often fail to materialise. This is common – after all the company will be looking to reduce, not increase, its dependency on the individual who considered leaving and at the same time will be proactively looking to keep ‘loyal’ employees happy so reducing the chances of them leaving. Whether the promises were never sincere or the organisation’s priorities shift, the outcome is the same.

WHY YOU SHOULD BE CAUTIOUS WHEN USING A COUNTER OFFER AS LEVERAGE WITH A NEW EMPLOYER

Some candidates “consider” a counter offer from their existing employer in the hope of getting their new prospective employer to increase their offer. This is a high-risk approach – candidates who are unhappy with an offer in the first place should not accept it. Using a counter offer as leverage undermines trust between them and their new employer before they even start and it is not uncommon for employers to simply withdraw an offer in these situations.

QUESTIONS YOU SHOULD CONSIDER WHEN YOUR EMPLOYER MAKES A COUNTER OFFER

Should you receive a counter offer when you resign then go through the checklist below to focus your thinking.

  • Why were you looking for a job in the first place, has your employer now resolved those issues?
  • Is the employer’s counter offer dependent on future promises? Or is it an immediate reality?
  • Will your employer doubt your long-term commitment to the company given your resignation and will this affect your future prospects?
  • Will your colleagues begrudge whatever measures your company has put in place to keep you?
  • What has happened to colleagues who have accepted counter offers?
  • Will the pay rise result in you becoming overpaid within your salary band?
  • How will expectations change with your new role/ promotion?
  • Do you believe you are one of the 20% who will last six months after the counter-offer? Or 10% who will still be there a year later?

The leap into the unknown of a new job isn’t one to fear – the chances are you will do it multiple times during your career. Recruitment processes are thorough and designed to maximise the chances of the employer finding the right candidate. You have earned the offer because your new employer knows you have the skills to do the job!

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