The Counter Offer
Before accepting a counter offer from your employer, consider whether you’ll be the winner or the loser in this employment manoeuvre.
Although no statistics are available, many employees who give notice are receiving counter offers from their current companies to encourage them to stay. These proposals can include one or more of the following:
- A pay increase.
- A promotion and/or added responsibility.
- A promise of a raise, promotion or other incentive.
- The creation of a new, more appealing reporting structure or organisation.
An employer may accompany its offer with an added motivator, such as a special call from the Chief Executive Officer and other flattering gestures. Or it may try to manipulate a departing employee by heaping on a sense of false guilt.
The Prevailing View
Now suppose that after months of interviews and negotiations, you accept a position with a new employer. When your current company makes a counter offer, you decide to renege and stay where you are. The popular notion is that you’re the winner. After all, you’ll be paid more money, keep your tenure and possibly receive a promotion.
Obviously, the jilted company loses. It must restart its search from scratch. Other good prospective candidates, who might have jumped at the job earlier, have long since accepted different positions or lost interest. The company has lost months of productivity and perhaps millions of pounds in unrecoverable revenue because the position has remained unfilled for so long.
Any executive recruiters involved in the search lose as well. Counter offers are a headhunter’s nightmare. A recruiter can lose face with a client company, a substantial amount of time and allocated resources and possibly income when a candidate backs out after accepting.
What Really Happens
If you’re considering a counter offer, why should you care about the jilted company or the headhunter? Aren’t you still so far ahead of the game that their misfortunes are just a small setback? Not really. In business, your reputation can be your most valuable asset. By backing out of a commitment to a prospective employer, a candidate loses all respect from the firm’s leadership.
Candidates who renege after committing to start dates are called "no-shows."
Why should a candidate care what a recruiter thinks, especially if they had never met previously? The value of a good search professional shouldn’t be underestimated. He or she can do more for you during a career lifetime than you might realise. But out of concern for client companies, reputable recruiters avoid candidates whose word can’t be trusted.
It’s Never the Same Again
The current employer who gains back its staff member may seem to be the big winner. Initially, it may appear to lose ground because of the pay increase or promotion it extends. However, these costs are minimal compared to the loss of momentum on a project or the expense of recruiting a replacement.
Still, winning back an employee is only a short-term fix, and the move may ultimately cause worse personnel issues. First, the company’s relationship with the employee is never the same. Most employees who accept counteroffers leave within six to twelve months, merely deferring their inevitable replacement.
Perceived Blackmail
Does the "no-show" really win? He or she may earn a bit more money, but the increase is borrowed from future earnings. An employer may make or attempt a few improvements, but will rarely change its culture for one employee. The employee’s integrity, loyalty and commitment are forever in question after this perceived blackmail tactic.
He or she will never be trusted or considered a member of the inner circle. Grudges will most certainly be held, whether overtly or covertly. Future advancement becomes more difficult, and the company will begin to seek a replacement.
What Should You Do?
It’s naive for executives to be surprised by counter offers these days. In fields where talent is at a premium, the offers are a popular retention tactic. But why would a company wait until the eleventh hour to keep someone it claims to value so highly? Obviously, the move is purely defensive. You may feel flattered, but don’t be fooled. A counter offer isn’t about what’s best for you; it’s about what’s best for the company.
If you expect to receive an offer to stay with your firm, how should you deal with it? First, don’t allow a counter offer discussion to occur. Leaving the door open for discussion induces the company to invest time and resources into enticing you to stay. This can make you feel guilty, which makes it more difficult to stick to your decision to leave, even though you know you should honour it.
Take an active part in your own career management. If your company is interested in your progression, you’ll know it before you decide to resign. If you change your mind and stay, your motives and methods will always be suspect. Keep a steady course and don’t look back.
Submit a courteous, positive and final resignation letter that leaves no room for discussion. By behaving honourably, you may have the option of re-employment with the company or to join a former boss elsewhere later on. You’ll also have the chance to start a promising new role with additional challenges, an expanded network, an untarnished reputation and a clear conscience. Everybody wins!
