What is a counter offer?
A counter offer can come in many forms, but it is often at the stage where you have made the decision to resign from your workplace. You have handed over your letter of resignation and, instead of accepting your resignation, your employer responds with an offer. This offer may be particularly appealing to you as it could include a promotion, a significant rise in salary, or both! Being faced with a counter offer can often catch an employee off guard – especially if they already have one foot out the door. But a counter-offer should be no surprise to you: Studies have shown that 67.5% of managers have proposed counter offers to employees. In fact, smaller companies with 10 to 49 employees are even more likely to pitch a counter offer, with an 80% likelihood of doing so.
Generally, if you are going to receive a counter offer, you should hear from your current employer within one week or less, but you will usually receive one in the first 1 to 3 days. Most counter offers will have an expiration date on the letter, but if it does not, it is assumed that your response will be within one week. It is important to take time and seriously consider the impacts of your decision before responding.
How to handle a counter offer
Take the lead in how your worth is defined
It is important to remember that your worth is in your own hands. If your previous employer was not accommodating to proposed pay rises in the past, this may simply be a knee jerk reaction. It is helpful to avoid disclosing how much your new employer plans to pay you so that your previous employer does not try to compete. An increase in pay should, ideally, not be based on competitive bartering for your skills, but rather on how much your employer values you in the first place. And, if your previous employer is only realising your true worth as you are heading out the door, it is unlikely to bode well for your future progression in the company.
Write a pros and cons list
Sending a letter of resignation to your employer is not a decision taken lightly. When faced with a counter offer, it’s important to recall how you made that decision in the first place and not to be blinded by the idea of a shiny new position or a raise. Writing a pros and cons list is an easy way to fast track any decision-making process and can help to keep you focused on why you wished to leave your position in the first place. It also allows you to consider your circumstances objectively, without letting your emotions (or your bank balance) flood your judgement. If you are feeling stuck, chat with one of our recruitment consultants about the situation. They have these conversations day in and day out, and are here to support you as an expert in the field. They will also be able to help you maintain an objective outlook if you find you are getting swept up in the overwhelm. When writing your list, keep your points short and sharp. Start with the question: What if I accepted this counter offer? Here are a few simple questions to get your started on each side of your list:
PROS
- What are the main benefits of accepting this counter offer?
- What favourable outcome would you receive that you don’t currently have?
- What could you accomplish?
- How will this decision contribute to your current career goals?
- How does it position you in the future?
- How does it impact others in your life?
CONS
- What are you giving up?
- What are the risks associated with this decision?
- What challenges does the position present, and could you overcome them?
- How would this position impede or possibly defer your career goals?
- How does it position you in the future?
- How does it impact others in your life?
Respond in a timely and professional manner
Accepting a counter offer is simple, negotiating will require strategy, but declining is entirely new territory. It is one that should be navigated carefully – both to limit potential damage to your current relationships and to maintain a professional relationship for the future. When declining a counter offer, you should:
- Match the employer’s medium. If they sent the offer via email, respond via email.
- Express your gratitude for their effort to retain you as an employee.
- State your rejection clearly, and put emphasis on your consideration (even if it did not take you long at all to make the decision).
- Be short and honest as to why you are declining. These reasons usually revolve around career milestones and trajectory – which cannot be argued with.
- Offer a referral. If you know someone who could be your perfect replacement, this could be helpful to your employer.
- Express your willingness to stay in touch (only if this is the truth).
Consider the downsides of accepting a counter offer
Damaged Employer Relationships
Studies show that only 12% of employees resign from their positions due to money. Odds are, you are resigning not just because of pay, but because you are disengaged in your position, and looking to grow in your career. By handing over a letter of resignation – especially after you have already tried to request a pay rise – you are clearly and obviously expressing your interest in other avenues of employment. This could be damaging to your relationship with your employer. Regardless of their level of professionalism regarding the situation, the relationship could prove to be difficult to repair if you choose to stay.
Psychological Safety
Did you know that nearly 80% of people who accept counter offers reignite their job search within the following 3 months, and end up leaving within 6 months? This is, in large part, due to the lack of psychological safety they feel, having initially shown their employer their intention to leave. It is important to feel psychologically safe at work so you are able to be yourself and thrive in your position, and with your team. Paul Santagata, Head of Industry at Google states “There’s no team without trust”. Handing in your letter of resignation, before rebounding by accepting a counter offer may reveal a tear in the seams of your loyalty. Unless you are willing to engage in open conversation and take the time with each colleague you interact with to rebuild their trust, your psychological safety will be at risk, and your team may suffer as a result.
The Value of New Opportunities
With a change in the workplace comes a new team, fresh ideas and the opening up of room for growth. Whether you have been in your position for years or for months, change allows you to advance in your career. It also allows you to learn a little bit more about yourself in a new work environment, which can help you to develop your skills, and discover your needs as a professional in your field.
Remember Why You We’re Leaving In The First Place
Revisit your pros and cons list. Recall post-work conversations; what did you say when friends and family asked you “how was work?” Did you feel as though you fitted in with the company culture? And finally, did you feel a sense of relief after handing in your letter of resignation? Be honest with yourself and honour your initial decision to explore new avenues. If it is fear that is stopping you from taking the leap, ask yourself,‘what is the worst that could happen?’
Making a final decision
Whether you choose to keep striving towards the career of your dreams, or double back for a take two, it is important to remember that your work life is malleable and ever-changing. This may be your first introduction to a counter offer, but as you advance in your career and your life, it is likely that you will encounter plenty more. In his book ‘The One Thing,’ Gary Keller refers to work as a rubber ball, with the ability to bounce back, and back again. The other four balls – family, health, friends, and integrity – are made of glass. If you drop one of these, it may be irrevocably scuffed, nicked, and perhaps even shattered. If your current workplace has affected your ‘glass balls’ enough for you to consider resigning, your own decision should not be ignored.
At Moir Group, we believe that a satisfying job is a key factor to achieving a fulfilling life. We write articles and run events across the year, which aim to support finance professionals to get the most from their job role. You can sign up for our events and news updates here.
