During my experience as an insurance head-hunter I have seen and dealt with lots of counter-offers and this is why I would like to share some of these stories or go through some of the pros and the cons of rejecting a counter-offer.
So, if you believe that after you got that job offer you dreamt about, the process is finished, you are actually on the verge of facing probably one of the biggest challenges: the counter-offer. Industry-specific research studies say that more than 40% of managers have made at least one counter-offer and over 55% of counter-offers are accepted.
Do we all agree that what job offer you accept has a great impact on your career/ progression but also your wellbeing and personal happiness? Sometimes this decision can weigh more than your Degree or your IQ / EQ score. It might sound controversial, but I am saying that because I know and have spoken with many amazing people with a brilliant mind or who got excellent academical achievements and degrees but made one or few not so good job changing decisions and therefore they are not where they deserve to be.
I believe that how we are reacting and dealing with counter-offers is crucial. This is a key moment for us and for our career development.
Accepting a good counter-offer, in my view, has always got a big downside and many repercussions.
First of all, I would not advise for someone to get a job offer and play it against their current employer for a pay rise – this method can only get you enemies, or your peers/manager will lose trust. It is a bad method of getting what you believe you deserve (more money!).
Losing colleagues’ trust will potentially lead to many other negative consequences such as: they could be avoiding in getting you on long term or new exciting projects (as they will fear you will leave). Now the leadership team has reason to doubt your loyalty as an employee and this will be reflected in future advancement decisions. Long-term advancement opportunities for you will diminish because trust has been broken. Accepting a counter-offer can also lead to loss of reputation and once it is lost it takes times to build it back up.
If you feel underpaid or do not feel appreciated/valued by your employer/manager raise these concerns. If you’re a strong performer and one of the few people within the organisation who knows how to do your job (eg you are in a highly technical role), then you’re in a good position to negotiate. Consider your position and all options before you look at external opportunities. Thus, if you do your homework diligently and explore all options with your employer tactfully, then no counter-offer given afterwards should change your decision because all good options were explored before. Be an initiator and voice your desire to progress, to learn and develop new skills. Do not let others decide when you are ready for a promotion or a pay rise.
Several articles and several research studies have claimed that more than 60% of employees leave their job after they accept a counter-offer within 24 months. This may be correct, but I also think that more than 60% of the people who have been in a job for more than 3-4 years are naturally more active in the job market (I assumed the person who accepted a counter-offer was in their job for at least 1-2 years). What has not been mentioned enough or researched into, is probably the path and the career progression of the employees who accepted a counter offer… how many people actually got further promotions and after how long ?
When your manager turns around and tells you they found more money, they just do not want to recruit again. In this instance, I would ask myself, why are they only offering me more money now and underpaid me for the last year/s? An increased package may make you happy in the short term. The gains will be diminished shortly after the raise as the extra money has to come from somewhere, and therefore it is very unlikely that you will not get a further salary increase at your next annual performance review meeting. Counter-offers could offer a supposed promotion or a promotion. I would always wonder why the organisation did not come to you before if they believed in your abilities??
Far from being a vote of confidence, the counter-offer is most times a quick-fix to your replacement.
The hiring costs are soaring, and every HR Manager knows this. Employee retention is difficult to manage nowadays, and counter-offering is probably one of the most efficient and cheaper ways to recruit: the costs associated with a counter-offer rather than recruiting someone new from scratch is merely comparable. However, when a counter-offer is made, this does not mean that employee is of a great importance, is a valuable asset or is a ‘vital person’ – Daniel Priestly coined this term in his book ‘Key Person of Influence’ (book I totally recommend). Most times, resignations come unexpectedly and very often at the wrong time (too busy to recruit, or lots of projects with a tight deadline etc etc) and therefore counter-offers are made to benefit the Employer not the Employee.
Also, if your new job is with one of the main competitors, there will also be the fear factorthat you will take business with you. This is another big reason why companies panic and counter-offer. Coming to you with lots of promises and potential pay rises does not show a strong vision and clear strategy for the organisation.
By accepting a job offer and rejecting it afterwards, you are burning bridges not only with the company that offered you the job, but also with the hiring manager that offered you, his colleagues/team members and the HR team (I have seen this in my career several times). People are changing jobs and they join other organisations, they will be recruiting in the future again and I am sure they will remember the people who rejected them in the past and wasted their time. Wouldn’t you?
On the other hand, I have also been told that there are some companies that simply prohibit financial counteroffers. I respect that because this says a lot about their culture. They don’t want to send out the wrong message that people can play games. Counter-offers sets a bad precedent.
Now, despite all reasons mentioned above that show why you should not accept a counter-offer but just feel flattered when you are being given one, I am certain that some of us will still accept a counter offer, so it would only be fair if I share with them my last thought: if you are being counter-offered and want to accept it, please can you make sure you get all details in writing such as pay rise, training offered and progression opportunities before you commit? I have seen many cases, when managers promise big pay rises and promotions as they panic of losing their team members, but there are many cases when those things do not actually become reality, or it takes months, if not years, to actually happen.