So, you’ve been offered a job with a new company, and you’re prepared to resign from your current role. You email your boss to arrange a meeting, write a resignation letter and you’re headed to the meeting. During the meeting, your boss proposes a counteroffer in an effort to keep you. What should you do?
Why might someone make you a counteroffer?
When you alert your current employer that you have received a job offer from another company, they may look to propose a counteroffer to hold onto you. This is to try and make you reconsider your resignation. Typically, employers will offer a higher salary or promotion to try and keep hold of you. If you’re being offered this, you’re clearly a valued, high-performing employee which is a compliment. An employer may make you a counteroffer if they wish to retain your knowledge of the company, customers, or processes. Also, it is a disadvantage for a business to lose one of their team as it takes cost and effort to rehire and train a new member of staff - especially at a senior level. They may be conscious of overloading the rest of their team with work to compensate for a lacking staff member. Your departure may also affect team morale and relationships. Therefore, it is no surprise that 50% of candidates that resign will be counter-offered by their current employer.
What to consider before you make any decisions
There are some things you may want to consider before accepting or declining a counteroffer to be sure that you’ve made the right choice:
- Firstly, do you think that it reflects positively on the company that a threat to leave is what is needed for anything to change? Your employer clearly isn’t recognising your worth if they are only prepared to offer you a salary increase once you are halfway out the door. Your new role has recognised your worth with a higher salary, so why should you have to demonstrate your worth by threatening to leave? It suggests that only desperate actions can instigate change at your current company. This behaviour doesn’t bode well for the future - if you or a colleague become dissatisfied with something at work, it may not be solved unless you take drastic action.
- Secondly, where will the money from the counteroffer come from? Does your company have the resources to offer a higher salary? Most companies will have strict wage and salary guidelines which must be followed. Is the money essentially an early pay rise? There is something about claiming that you need to pay an employee a fixed salary but then offering a higher wage when they are about to leave that seems disingenuous.
- Resignation threats usually create an uncomfortable atmosphere. Now you might have raised issues with management and your loyalty may be in question.
- Having shown your employer a willingness to leave, even if you have not yet made the decision to leave, your employer’s opinion of you may change and their behaviour surrounding you. For example, if the company faces cutbacks, it will be easier to justify letting you go. Following this, if a promotion becomes available, they will likely select those who have seemingly remained loyal over you.
- Showing mention of leave may disadvantage you in the long term if you take the counteroffer and stay in the end. Although you may have been offered a higher salary to incentivise you to stay, it may not be feasible or maintainable for the company to continue paying it long-term. Your employer may look to phase you out in an attempt to find someone to replace you and work for your previous salary.
- It may be tempting to stay within the safety blanket of your current company rather than branch out and change location. But remember the original reasons you had for wanting to leave, even if you’re offered a higher salary, often the problems that caused you to decide to leave in the first place will resurface. Are you just delaying the inevitable? If your new job offers a different role/industry or something else you’re looking for then it might be a good idea to go for it.
- Statistics show that those who have accepted counteroffers from their employers are extremely likely to leave within the next six months or be let go within a year. 9 out of 10 candidates who accept a counteroffer leave their current employer within the next twelve months and 80% end up leaving within 6 months. Meanwhile, an extraordinarily high 50% of people will leave within the next 2 months after accepting a counteroffer. From these statistics, it is clear that counteroffers are typically a very short-term fix that do not deal with the root of why people want to leave their jobs in the first place. In most cases, if your original intentions to leave were legitimate, it is probably best to proceed with taking the new job offer.
We hope to have helped you in your decision-making process if you are currently considering a counteroffer, whether you wish to take it or not, it is important to remain confident in your decision. But be cautious of them!