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Counter Offers - Are they worth considering?

16th December 2021

Most of us who’ve had a few roles under our belts will understand the awkwardness and nervousness that you can feel when leaving your current role. As a reflection, most employers experience this too; finding out that one of your most valued employees is looking to ventures new can leave both parties feeling unsure about what the next steps are to take. Managing your employees or employer during this process is key to ensure a smooth transition; in this post we talk about counter offers and their implications.

So what might a counter offer look like?

The most common form of counter offer will manifest in a pay rise. Most often an employee will be seeking a pay rise that might previously may have been declined and their new potential employer is offering more; a simple pay rise counter offer from your employer might have you considering the option to stay - after all, money talks! A counter offer might also be the request to see-out an ongoing project, testing your loyalty to the firm. Finally, the last common form of a counter offer might be a promise to increase your holiday entitlement, for those who aren’t seeking a pay increase or who are feeling the pressures of their current role, this is always an attractive offer.

Counter offers can be treated as a short-term solution to a long-term problem.

So what’s the big deal with counter offers?

Statistics have shown that while just 5% of all counter offers are declined, the vast majority of those who chose to stay will be gone within 12 months. This is down to a few causes:

For those seeking a pay rise, the counter offer which promises said increase might keep you happy in the meantime but it could mean your future bonus is docked. The money hasn’t been plucked from thin air! Your management will have to justify the fact that you’ll be doing exactly the same job but for more money, potentially making you seem like an expensive employee. Furthermore, a pay rise isn’t usually the only reason employees are looking further afield, 92% of employees looking to leave are dissatisfied with the management style at their firm.

There are wider implications too. Accepting a counter offer can make you feel like a valued member of the company, and to a certain extent you’re right! Your employer clearly doesn’t want to let you go! Approaching it in a different light, how might your colleagues feel about you receiving a pay rise after kicking up a fuss? Counter offers can lead to imbalances in teams and low morale across the office floor.

Many people describe counter offers as knee-jerk responses and can be poorly executed. They often fail to address the majority of issues an employee is facing and from the employer’s point of view it’s worth bearing in mind that they can set a dangerous precedent. Is it likely that the next vital employee that’s threatening to leave will also expect such an offer? Prevention of this stage should be a business’ goal, regular meetings between employees and their management should be encouraged and is an effective way to manage the expectations of both parties. Knee-jerk responses can be avoided if there is honest and two-way dialogue between a business’ employees and its management.

Why else should you be wary of counter offers?

Imagine telling your manager that you plan to leave because you are unhappy about pay, the management and career prospects. Your employer, in their own interests offer you a ‘quick-fix’ counteroffer that addresses all of those aspects on basic terms with the view to progress; this aims to keep you happy without the hassle of getting in a replacement of the same standard. Even if you then accept that offer, you cannot ‘un-ring’ that bell of dissatisfaction. Your manager will now be watching you closer and you will have essentially sown your seeds of doubt. It may even be that the counter offer you’ve accepted acts as a buffer for your employer, enabling them to start your transitional exit and the recruitment of your equal; you’re not likely to feel valued when that happens.

Once you’ve told your employer you are unhappy and are willing to leave, your working relationship has taken serious blows. Trust and loyalty have essentially disappeared and your next steps will be scrutinised in a new light, it’s not difficult to imagine why those who accept counter offers don’t stick around for long!

So why should you take your fancy new job offer?

  1. If you don’t make the leap, you’ll always wonder ‘what if’.
  2. If you’re unhappy about pay, this pay increase will be at the expense of bonuses and benefits.
  3. If you’re unhappy about management, your boss is unlikely to change and you’ll be scrutinised in a new light.
  4. If you’re unhappy about career prospects, it’s unlikely you’ll be offered serious progression in light of the fact you are critical of the company and lack loyalty as you were willing to leave.
  5. If you believe you are worth your new counter offer salary, you shouldn’t have had to negotiate it. Your employee would have paid you that from the beginning if they believed the same.
  6. Rejecting that new offer will make you seem indecisive and unwilling to commit. You could potentially be burning bridges to exciting opportunities.

It’s worth bearing in mind that the most prized employees will always be the ones that receive offers from elsewhere. Take the opportunity and move on!

 

 

Sources:

Forbes.com

Zafar Modak - LinkedIn

 

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