When a valued employee gives notice, employers may respond with a counteroffer. What would you do if offered a promotion, raise, equity, and accommodations to your work schedule? In other words, everything you asked for—if you stay on? Let’s face it, counteroffers are flattering, tempting and, at least momentarily, distracting. While some companies have a no counteroffer policy, more management teams may resort to them given the 1% tech unemployment rate. We believe counteroffers are the “Trojan Horse” of employee retention strategies, as they perform the innocuous function of keeping an employee happy while unleashing a whole host of other problems.
Al Pacino’s character in Carlito’s Way said it best, “Just when I thought I was out, they pull me back in.”
So how do you respond? It ‘s important to realize that when your manager presents you with a counteroffer, much more is at stake. The intention to leave often alters employer trust and transforms the workplace environment. Furthermore, your employer may not have your best interests at heart, only keeping you on long enough to buy time for a replacement.
Nevertheless, as long as there’s a talent shortage and the cost of backfilling eats up valuable resources, counteroffers will continue to pop up. As professional recruiters who broker job offers for a living, we’re particularly attuned to the high emotions at play around a counteroffer. How you feel will sway your perspective, which will change every day, if not every minute. It’s important you make an informed decision by asking yourself the right questions.
1. Why am I looking to leave my current job?
- If more money is the focal point of your unhappiness, then a counteroffer is only a short-term solution with long-term consequences. Giving into your pay demands causes a riff in the structure of how the organization approaches retention and can reveal what you’ve expected all along: you have been underpaid. Your prioritization of your paycheck will negatively resonate with your employer, and that breach of trust won’t bode well for day-to-day activities. Management may begin to scrutinize your work. Co-worker relationships are impacted too, as workplace gossip spreads of your raise while their pay remains stagnant.
There are fundamental issues that cannot be resolved
- Whether it is the work culture or the direction of the company, revisit what made you decide to start looking elsewhere. Does the organization continue to underinvest in your department? Are there plans for a change in management? If a promotion doesn’t change that, assess whether you can remain vested in a company that doesn’t align with your needs and preferences.
2. How will this change my workplace environment?
- A counteroffer doesn’t have to negatively affect your relationship with your co-workers. They may congratulate you and applaud your decision to stay with the company. However, according to a Careercast staffing survey, this reaction is rare at best. An overwhelming 80% of employees who accept a counteroffer report that co-worker relations and productivity deteriorate as a result.
- The biggest conflict that arises from a counteroffer is the issue of trust. When you approach your employer with another offer, they begin to question your commitment. In fact, the counteroffer can be a managerial tactic that buys time to find a replacement.
3. Where will I be happiest?
Like many life decisions, it is absolutely paramount that your choice in occupation makes you happy. Therefore, when deciding between two jobs, it is important to assess your satisfaction with both in order to come to the right conclusion. Here are some guiding questions to help you gauge where you stand on each job:
- Do you prefer being “the new guy” or staying in a familiar environment?
- What is your primary deciding criteria for taking a job? (i.e. salary, compensation, people, company role)
- Does the job fall in line with your long-term career goals?
- How do you like the job’s commute/location/distance from family?
Don’t forget to weigh these answers with other considerations taken from the previous two sections. If the counteroffer turns out to be your best option, be sure to clearly express your satisfaction to your employer. It could go a long way in repairing your workplace dynamics and make your counteroffer a successful one.