Are counteroffers counterproductive?

In almost every industry, you can expect to see counteroffers throughout the career lifecycle. In one of our previous articles, Sign Before You Resign, we discuss the importance of securing your new position before leaving your current workplace. This shows a clearly thought-out career decision. That said, we are still seeing many candidates having second thoughts and swaying toward counteroffers.

In the current market, it is almost guaranteed that any good employee looking to leave will be offered a better deal by their employer. We have seen business owners burnt by candidates who go through a lengthy recruitment process only to then pull out at the last minute due to a counteroffer from their existing employer. We have heard of unanticipated counteroffers resulting in employees withdrawing their resignation. The market is fierce at present, we’ve seen and heard of:

● Promises of promotions
● Responses in the form of as much as 20-22% salary increases
● Individuals telling clients they’ve been offered roles (when they haven’t) to leverage a higher salary
● Lucrative salaries offered to secure new staff
● Trainees receiving multiple offers and surprisingly strong salaries without experience

Although some of these may seem persuasive, the novelty of increased pay and new responsibility wear off eventually. It’s worth considering that in 2018, software company Eclipse conducted research that indicated:

● Around 80% of candidates who accept a counteroffer from their current employer end up leaving within 6 months
● 9 out of 10 candidates who accept a counteroffer will leave their employer within 12 months
● Half of candidates who accept a counteroffer from their current employer will be back on the job market after two months.

Given these statistics, it’s understandable why some HR departments restrict or even avoid counteroffers as a whole. Counteroffers can set a bad precedent in contesting with every rival company. They pose two risks:

1. Potentially diluting the impact of a meaningful counteroffer
2. Creating a company culture with eroded morale and trust

For businesses with a sensible holistic approach, having an essential strategy to retain your most valuable people ensures expertise remains within the business.

As an employee, pursuing your career goals to better yourself is a no-brainer. However, handling a counteroffer unprofessionally or even ghosting prospective employers as we’ve seen previously, could eventually cost you. Your career is based largely on job satisfaction, and these seemingly lucrative propositions – whilst tempting – are almost always a temporary fix.

We would always advise candidates to outline their career goals and solidify their decisions before entering any discussion with their employer.

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