What is a Counter-Offer?
A counter-offer is an offer given by an employer in order to try and persuade an employee to stay at the company, typically after the employee has already been offered a job elsewhere. The counter-offer typically involves an increase in salary, benefits or job role. It is important to note that a counter- offer, or any offer from your current employer, must not be viewed as an act of loyalty. Rather, it is simply a business decision as it is ultimately cheaper for the company to keep a pre-existing employee than to hire a new one.
Pros of Accepting a Counter-Offer
It is important to weigh up the pros and cons carefully before making a final decision. Here are some of the advantages of accepting a counter-offer:
• Increase in salary or benefits – Often, counter offers involve an increase in salary or benefits, such as annual leave or health insurance. This can be particularly attractive when considering the cost of leaving a job and the potential of starting over in a new job.
• Increased job security – After making the decision to stay put, you will typically feel more secure in your current job position. For those in an unstable job market, staying with your current employer can mean more stability.
• A better fit with current job – If you have been offered a better job role at your current job, then it can be a great choice to stay with the company you already know. This may also include better job opportunities for future advancement.
Cons of Accepting a Counter-offer
On the other hand, it is important to consider the drawbacks of accepting a counter-offer:
• Strained workplace relationships – Even though you may exhibit loyalty to your current employer by accepting the counter-offer, superiors may begin to doubt your loyalty. It is also likely that the people making the counter-offer will expect a higher level of commitment in future, so be sure to read the fine print of any new offer before accepting.
• Risk of further counter offers – Once you have accepted a counter-offer, your employer will be more likely to offer counter offers in the future, causing you to face similar decisions each time.
• Harmful effects on relationships: Accepting a counter-offer can potentially damage your relationships with both your current and potential employers. Your current employer may feel betrayed that you were considering leaving, and the potential employer may not be happy that you backed out of the job.
• 80/20 rule: A popular statistic in recruitment, (source unknown), is that 80% of people who stay for a counter-offer leave within one year anyway. Chances are “the root cause” issue of why you wanted to leave in the first place still remain.
How to Decide Whether to Accept a Counter-Offer
So, how should you decide whether or not to accept a counter-offer? Here are some tips:
• Consider the pros and cons – Make sure to weigh the pros and cons of accepting a counter-offer against the pros and cons of leaving your current job. Consider not only financial benefits, but also job security and career advancement opportunities.
• Consider your motivations – Ask yourself what is motivating your decision to stay or leave. Are you motivated by money, job security, or career development opportunities? What is most important to you in your career?
• Consult with a trusted mentor – Talk to a trusted mentor or career counsellor to help you weigh the pros and cons and make a well-informed decision. An honest, external point of view can be very helpful in making a tough choice.
Conclusion
When deciding whether to accept a counter-offer, it is important to be aware of both the potential benefits and the potential risks that accepting a counter offer can have. On the one hand, a counter- offer could see you with improved salary and better benefits, while on the other hand, you could risk having strained relationships with both employers. Consult with a trusted mentor if necessary. Ultimately, it is up to you to make an informed decision.