Counteroffers: How to deal with them

What’s better than receiving one offer? Receiving two offers! 

After you hand in your notice and receive an offer from an external company, it’s not uncommon for your existing employer to react by offering you a counteroffer. Your employer will offer you a counteroffer in an attempt for you to reject your existing offer and stay with your current company. The offer may contain more money, flexible hours or additional bonuses to name a few. The question is: Should you stay or should you go? 

Counteroffers are a tricky position to be in, because as you may have reasons for wanting to leave initially, your existing employers offer could be too great to turn down. 


Why companies make counteroffers


Counter-offers are typically a reaction from a business losing out on a valuable team member as well as other reasons. In addition to the value of the employee, the expenses as a result of losing that particular employee are just too great to let them go; especially at senior level. It can cost as much as 213% of a senior executive’s salary to find a replacement. For an employee making £85,000, this could amount to £181,000 when you factor in a drop in productivity and recruitment and training expenses.

The effects of Covid and the skills shortage, have led to businesses being vary careful of the talent they let go, especially if they can’t find a suitable replacement. 


Before deciding whether to accept it or not, there are various factors you should consider. 


Is the counteroffer worth it? 


Counteroffers are an attractive proposition for employees because their needs could be met and it also saves them having to master the working ways of another company whilst building new relationships in the process. However, by accepting a counteroffer and depending on the conditions within the counteroffer, there is no guarantee that it will be a long term solution. 

You must consider the reasons that made you want to look for a new position in the first place. 


Your happiness 


Your happiness in your current position will determine whether a counteroffer persuades you to stay. If it’s an increase in salary, will that make you more satisfied? According to Office Vibe, only 12% of employees resign due to salary. So this increases the chances that your decision to look elsewhere is beyond financial gain. Understanding your long term ambitions will help you determine your next move. 


Your relationship with your current employer 


This may depend on the relationship you have with your current employer; however, if you decide to accept a counteroffer, there is a chance to could cause a strain in  the relationship. The reason for that very well depends of the conditions of the offer. If it is to do with salary, this could question your loyalty to the business. Will you decide to move on if a better offer comes along? 

This will leave both employer and employee unsure of their counterpart, and likely to be planning for a potential change. 


Are you expendable? 


In the present climate, we have seen more redundancies than in previous times. Businesses have had a tough time letting talented employees go due to economic strains. Since you have expressed your desire to leave initially, your job security decreases. If they were to make redundancies at any time, you’re likely to be at the top of the list. 


Will you be motivated to deliver? 


You’ll only produce your best work if you’re motived to deliver. By accepting a counteroffer, you’re likely to be accepting more responsibility – are you ready for that? You’ll be working hard to prove that you are worth what you believe your company should be investing in you. Unless you have agreed on specific changes in your counteroffer, you are likely to be working in the same environment that you previously wanted to leave. In order to regain the trust of your employer, you’ll have to work extra hard to prove that your abilities are still there and you’re still motivated to produce your best.