Why you shouldn’t rush into accepting a counter offer

Hakan Enver 27.05.2019

Receiving a counter offer can seem flattering on the surface, but is it always a positive thing for an individual to accept and stay once they’ve taken active steps to look for a new role? There are numerous reasons why you shouldn’t rush into accepting a counter offer.

A counter offer might not be exactly what it seems

Once you have decided that you want to leave your current role and have proceeded with all necessary processes, there is a chance that you will be presented with a counter offer. Regardless of your sentiment towards your employer and current role, it's always flattering to receive a counter offer and the salary increase is always going to be enticing. But despite this, there is likely to be a far more commercial reason as to why a counter offer is made.

A counter offer is often a knee-jerk reaction from your manager. The potential of their team losing a key member is a direct reflection on them and so they will do whatever they can to keep you. Some of the detrimental implications of losing an employee are:

  1. Cost: Replacing employees is more expensive in terms of both cash and time than retaining them.

  2. Vacuum: Replacing good quality staff in the current climate is difficult - there is a distinct shortage of talent in many professions.

  3. Skills: The loss of knowledge and the subsequent need for retraining is time consuming and expensive for the organisation.

  4. Instability: The potential domino effect within the team can be damaging as others question their own predicament and the shift in culture that comes with new people could also drive employees away.

  5. Resource: With a freeze on headcount, managers may be unable to replace lost staff. 

What they might tell you...

Managers may not be quite so candid, however, when presenting you with a counter offer. It will typically be packaged with much more emotional leverage:

"You're too valuable and we need you."

"We were just about to give you a promotion and it was confidential until now."

"What did they offer, why are you leaving and what do you need to stay?"

"The MD wants to meet with you before you make your final decision."

There might be negative implications behind the counter offer

Companies will frequently offer large salary increases, new projects, promotions and modified reporting structures. Although this may appear exciting and tempting, there are often negative implications which may not be immediately apparent.

Once you have resigned, particularly if it is to join a competitor, your relationship can change. The perceived lack of loyalty may create a reduction in trust and respect from your manager, jeopardising your involvement in future projects. There is also a good chance you could miss out at the next pay review and it’s not unheard of for the decision to stay on after a counter offer resulting in a lower than expected payout come the next bonus round.

What’s even worse, from our experience, approximately 80% of those who have accepted a counter offer leave or are terminated between six months and a year later. And of that 80%, over half reinitiate their job search within three months.

Percentage of professionals who leave within 1 year of a counter offer

What counter offer advice can we give you?

  • When you accept a new role, ensure you are committed to it.
  • You must understand that many of the issues causing you to consider a move in the first place will still be there regardless of any pay increase you might be offered.
  • The short-term cash gain as a result of the counter offer may not work out as beneficial as it may first seem in the long-term.
  • Remember the impact that your resignation will have on your manager, so don't use resignation as a negotiation tool. Only resign if you actually want to leave!
  • Consider the bigger picture and the new opportunity, as well as the commitment made by the new employer to get you on board.
  • Don't burn bridges. Be clear and consistent with communication to all parties.
Hakan Enver's picture
Managing Director
henver@morganmckinley.co.uk