Is Your Counter-Offer Counter-Productive?

So, congratulations you have searched for a new role, been selected, been offered, have accepted AND resigned! You’re home and dry right? Ready to walk in to the sunset!

NOT SO FAST … assuming that you are a valuable employee, and assuming that the axe wasn’t about to fall anyway through dismissal or redundancy, a counter offer is likely coming. I have found throughout my 15+ year recruitment career, primarily dealing with mid-senior level permanent roles, that the counter-offer is often the biggest ‘surprise’ in a recruitment process. However, it really shouldn’t be a surprise and this blog will fore-warn / fore-arm you from getting side-swiped; plus, will also give sage advice and proven tactics to move past ‘the counter’ to your carefully selected new role that you likely fought hard for!

So, if you are a valuable employee or put another way someone fulfilling a necessary function in the business then EXPECT a counter offer upon resignation or soon after during your notice period. You may well be flattered at this point, and why not, the company will not counter-offer someone they were hoping to leave or were planning to fire anyway for example. However, don’t be too flattered. In an economic/market situation of close to full employment (UK 2016), and deep skills shortages in certain industries, then a counter offer is becoming standard practice.

NB. The typical assumption is that a counter offer will be more money, and this is typically a key ingredient. However, the hot-buttons likely to change your mind could be in the form of other tempting factors such as home-working, reduced hours, promotion etc. Realistically, whatever they can throw at you that may work!

You may not think that counter offers are very common as you likely haven’t heard about them very often. I think this is largely because of the two following scenarios. 1. If the counter offer is made and the employee leaves, then they just leave, often quite quickly and without too much wider discussion. If the counter offer is made and the employee stays then a stated or implied part of ‘the deal’ is not to talk about it or at least not to give specifics. (This is to try and avoid a ‘bad’ precedent).

So why is the counter offer so common? Think about it from the employer’s point of view. The employer has likely been surprised by the news and has no other immediate plan to ensure continuity of business/operations with respect to your role. They are therefore concerned, inconvenienced, and maybe offended. Psychologically your bosses probably would like to continue to ‘call the shots’ and would like to dictate or at least influence what happens next. Practically they are about to incur the cost in terms of time and money in replacing you. I have read estimates on recruiting and on boarding a new employee ranging between anything from £5K to £50K depending on who is estimating and for what position.

Therefore, the quickest, easiest and most cost-effective solution to the new problem is to ‘buy-off’ the employee, carry on with business as usual, and potentially make contingency plans for the fulfillment of this role going forward. This is because the chances are this employee is going to leave at some point in the near future, having shown their cards, OR the employer may ‘cut them’ at a future time that suits them! (More on that later).

So should you accept the counter offer? I guess in the interests of fairness I should point out that a counter offer is sometimes merely a moving forward of an existing plan to reward you for your efforts and performance and if money was the main reason for leaving then you could consider it. However, 90% of the time, let’s call it what it is … the counter offer is a bribe! A bribe that I suggest not to take for many reasons discussed below but principally because it doesn’t resolve your issue(s).

Why refuse? So, you have been given a counter offer, typically more money, maybe with a concession or two that doesn’t cost them much around your working schedule. However, what were the main or other factors around your looking / leaving in the first place?

Underlying issues: These underlying issues still exist, some more cash may plaster over these cracks but will just be a temporary fix if ‘structural’ problems remain. If your boss is an idiot, (s)he is still going to be an idiot next week, if you hate your commute, the office is still going to be in the same place next week, if you are concerned that your company is going down the tubes then shutting your eyes and staying is not going to help you longer term! (Insert your own example).

Relationship: Plus, the relationship has changed at the point when you resigned and will essentially never be the same again. You have shown discontent, which may be viewed as disloyalty. It’s kind of like if your relationship partner has left or threatened to before, then the element of doubt will always be present that when the going gets tough or when a better offer comes along then they may head for the emergency exit again!

Money: Also, this money that has just been produced for you has to come from somewhere or at least be seen to come from somewhere organisationally. Are you sure it’s not just your next pay rise a little early? Remember that you will also be getting pay reviews and pay rises at the new company you’re planning to join.

Last in First Out: It is quite possible, to pick another cliché that you have a target on your back that you will be last in line for a future promotion. Also, maybe first in line for the chop if redundancies are in the offing. This may sound terrible but realistically the alternative is that a company lays off a loyal employee that planned to stay until retirement, retains the person who previously resigned only to have them leave 6 months later. Such decisions are always tough calls and having been in this seat, in the recruitment industry in recent recessions, I never envy a manager having to make forced layoffs.

Even worse: This is going to sound more than terrible, more horrific but I’ve literally seen it happen: If someone resigns, gets counter offered so as not to inconvenience the company and stays … the boss/company may then let the person go on their terms i.e. at a future time/place/situation that suits them. Indeed, they may be conducting a ‘confidential search’ from the point of the previous resignation and pull the trigger once they are happy they have found a viable replacement. Yes, harsh but certainly harsh reality.

Value: Ask yourself why you are suddenly more valuable now? Realistically nothing has changed since last week. Were under-payed before: In this case why would you want to work for an employer who knowingly underpays and waits until you resign in order to address this? Are you over-payed now? In this case, you may be at risk of redundancy, because the company may not perceive they are getting value and cheaper resources may become available.

Market forces: Jobs are not typically talked about in these harsh economic terms, however, the job/employment market, is just that, a relatively capitalist, relatively free market where regular market forces of demand/supply and price apply.

Change: Why should ‘things change’ this time. Maybe you have been here before with this company, given that you’re planning to leave with commitments or just expectations not met. As a 15+ year ‘Recruitment Veteran’ I find what is typically referred to as ‘false promises’ comes up all the time as a reason for leaving current employment.

Psychology: Some people are thicker skinned than others of course and it may not bother everyone, but many feel different, after accepting a counter offer. For me personally, psychologically I would not want to stay in a work environment where I felt I had been ‘bought-off’.

80/20 rule: For those that choose to go against the general consensus of advice and opinion and accept the counter offer, the chances are, for any or many of the reasons above that this person will be gone soon enough anyway. A popular statistic in recruitment, (source unknown), is that 80% of people who stay for a counter-offer leave within 1 year anyway. Again, because the ‘root cause’ issues remain.

You earned it: To turn this around to more of the positives of rejecting a counter offer, vs the negative reasons to accept one; you have invested time effort and likely emotion into your successful job application. You’ve earned it, why not go through with it, and don’t be paralysed by your fear!

Burning bridges: Why burn bridges with your future employer. They were hopefully carefully targeted in your job search. To accept a job with them and then renege is not going to be popular and may ‘burn the bridge’, meaning you may never get in with them. This will be super-frustrating if you want/need to revisit them soon for reasons in 80/20 rule above.

So, bringing this blog into land, I think you can more than see where I stand regarding counter-offers! This may seem a little over the top in areas, but I wanted to get all the main points out in the open and you can obviously draw your own conclusions.

I understand that every job, person and situation are unique and therefore there can be no one-size-fits-all advice. Therefore, if you like your counter offer, don’t dislike your current job/company and trust that the changes will be actioned, then maybe you should stay and won’t regret it.

HOWEVER, if you do stay:
• Get everything in your counter offer in writing ASAP.
• Let the new company know (apologise), in person.
• Don’t say I didn’t advise otherwise!

My last thought and reminder is that money isn’t the most important thing, (I know it’s easy to say and hard to live out). However, if this has all been about the money, then I highly suggest thinking of other things that it could be about such as skills advancement, career development, job satisfaction etc. Get those right and money will follow. This shift in perspective you may help with your bigger picture as you consider career planning which is a topic for a future blog.

All the best with your move / not move decisions, and keep me posted on how you get along! If you are looking for advice on any job search / recruitment issue, feel free to give me a shout. Plus, if you are looking for first class representation as a client or candidate I will always be happy to hear from you.


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TW @MacstaffUK