ARE
COUNTEROFFERS
WORTH CONSIDERING
There’s no question that a counteroffer from an employer can be flattering. The kudos are great and the extra cash can be tempting, but more often than not, the benefits of accepting a counteroffer go to the employer, not you. The hit to your career (not to mention your reputation) can be severe. Chipping away at the veneer will reveal the truth about what's behind a counteroffer and why it's such a mistake to accept one.
why do employers make counteroffers?
your irreplaceability quotient
you’re good at what you do. Perhaps too good to let you go. Talent usually speaks for itself and employers know when they’re losing someone valuable (hence, the counteroffer).
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competitive advantage
it's one thing to lose a great employee (you) - it's another when an employer thinks you’re going to a competitor. When that happens, the employer may do everything possible to keep you from leaving. That has less to do with you and more to do with your employer's desire not to lose to the competition.
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train in vain
for most employers, the cost of training your replacement will usually be more expensive than giving you a raise and keeping you there. Again, not about you but about costs.
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the morale of the story
when a great employee leaves a job, it can damage the employer's reputation with other employees or in the job market. It can also have a drastic effect on employee morale, resulting in productivity reductions that can cost the employer much more than the cost of giving you a raise or a promotion.
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counteroffers are cheaper
most of the time, it's cheaper to give you a counteroffer than it is to fix the problems that are causing you to leave your employer in the first place.
why you should never accept a counteroffer
If your employer does give you a counteroffer: great - you got your employer's attention. But look behind the veneer of a counteroffer, and you might just discover that the cost to your career can be much higher than the reward.
reputation matters
You’ve accepted another offer from an employer. You’ve given them your word. You shook hands. Consider the effect on your reputation if you then accept a counteroffer. Not only will your new employer think you lack commitment, but he/she may think you’re just in it for the money, not the work. That will affect your reputation with that employer, and perhaps even in the marketplace, making it much more difficult to find jobs in the future. On top of that, your old employer will think the same thing and begin the process of replacing you anyway (this time, on his/her agenda). At the very least, he/she may look at you differently, wondering when you're going to leave again. To prepare for that eventuality, he/she may give other employees special projects, better technologies, bigger responsibilities and/or promotions. Eventually, you'll end up leaving anyway, but now with your reputation severely affected (in the negative).
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temporary solutions to permanent problems
When considering a counteroffer, determine whether the employer has permanently rectified all of the issues that caused you to seek another job in the first place. More often than not, the problems that motivated you to leave your employer will still exist long after you accept a counteroffer with your current employer. That's why employers use counteroffers: to avoid the costs of having to fix those problems. Studies have shown that when an employer doesn't rectify those problems, you’re more likely to leave that job within six months of accepting a counteroffer. Think of all of the great work you could have done in those six months, the lost time that you invested in seeking another job, along with the hit to your reputation in the job market, not to mention all the great job opportunities you missed (with better employers) during those six months.
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how much does your employer really value you?
If your employer doesn't see your value before you resign, what makes you think he/she sees it after you resign? More likely, an employer that makes a counteroffer is just trying to buy time until he/she can replace you. If the employer really saw your value, long before you resigned, he/she would have given you that raise or that promotion, or placed on you a great career track or dealt with the issues that caused you to seek another employer. Ask yourself: what type of company would only do these things after you threatened to leave them? In the future, when you have issues you need the employer to address, will you have to threaten to resign again? Is that the kind of company you want to work for? Or, would you rather work at a company that recognized and appreciated your talent, and dealt with any issues properly?
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isn't it your own money they're offering in a counteroffer?
If you get a counteroffer, ask yourself how the employer budgeted for this money. Did you just receive next year’s raise this year?
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career block
Unless your employer takes concrete steps to rectify the problems that caused you to leave in the first place (and most employers do not), he/she knows that it’s just a question of time before you’ll leave (the aforementioned six months). But often, time is all the employer is after – time to find your replacement. In the meantime, your loyalty is now in question and the trust you had with your employer is diminished (since he/she knows you're only there temporarily). With that lack of trust comes exclusion from the employer’s “inner circle”. It means not being involved in new projects or technologies. It means not having a seat at the table (since the employer knows that eventually, you’re going to leave anyway).
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great companies do not make counteroffers! period.
They already pay well, challenge their employees and work on cutting-edge projects. They don’t need to make counteroffers because they know they have a pipeline of great people waiting to replace you. If you get a counteroffer, take it as confirmation of what you knew to begin with: it’s time to move on.
how to deal with the counteroffer
for your eyes only
One of the best ways to avoid the awkward experience of dealing with a counteroffer is not to disclose your new salary to your old employer. If he/she insists on knowing, mention that the issue of salary was not really the reason you were leaving – that you were looking for new challenges or new technologies or perhaps you were looking to work with a specific person in your field. Whatever your answer is, keep it truthful (as always), and avoid discussing the salary.
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offer to help
If your employer insists on giving you a counteroffer, saying something like the following should end the discussion, and finalize the matter:
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“I’m very grateful that you would make this counteroffer, but, I’ve given my word to my new employer and one thing I could never do is break a commitment that I’ve made. I’m sure you can appreciate that. I know that my leaving may put the company in a somewhat difficult position, so I’ve made sure to organize all my work, and I’ve also made very clear notes for my replacement. In fact, I’ve spoken to a number of qualified people that I think would be great at this job and I’m happy to spend much of my remaining time helping you hire or train my replacement. If there's anything else I can do to help make this transition as smooth as possible, please let me know”
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remember your reputation and your future
Try to keep your reputation and your future at the forefront of your mind at all times. They're both on the line, and that will keep you focussed on not jeopardizing either by accepting a counteroffer.