What to Consider When Presented with a Counteroffer.
So, you’re starting to feel unsatisfied in your current role and decide that you could not only be making more of an impact but also earning more money.
After looking for new opportunities and a month of interviewing you have landed a new job with better pay. You feel like it’s time to make the move. You hand in your resignation only for them to ask, “What would it take for you to stay?”
Now you’re feeling perplexed and questioning your next move. Should you stay - or should you go?
First Things First: What is a Counteroffer?
The above scenario outlines a typical counteroffer. A counteroffer is an offer made by your current employer in terms of a better compensation and/or benefits that is given after you have submitted your job resignation.
There are many reasons why companies use counteroffers to influence
employees to stay.
A few reasons include:
Cost of finding a replacement
Loss of valuable staff/production time
Difficulty in locating individuals with necessary skills/background
According to Tony Lee of Society for Human Resource Management (SHRM), “While most managers don't embrace the practice, they do admit to using counteroffers from time to time as a retention tool…That said, 37 percent said that extending counteroffers sets a bad precedent; 34 percent said it erodes employee trust; and 30 percent said it negatively impacts employee morale”.
Are there times when it makes sense to accept a counteroffer? Yes. We typically find that this occurs when the issues at hand have not been communicated clearly between an employee and their employer. But in most instances, counteroffers are a temporary fix to a problem that will continue to reveal itself over time. Read on to learn more…
When Does it Make Sense to Accept a Counteroffer?
Did you talk with your manager about what was bothering you before you started looking for a new role- or before you started talking with a recruiter? If you’ve been lured by a shiny new title or promises of increased comp without having had a serious discussion with your current manager about your goals, you may want to seriously consider what is being offered to stay.
We’ve outlined 3 questions/scenarios below that may lend themselves to a decision that puts you closer to the “staying” side of the predicament.
1. Do You Really Want to Leave?
Do you like your boss? Do you enjoy the work you do? If you genuinely enjoy what you do, the company you work for, and the people you work with, then you may want to reconsider the true motivation for wanting to leave your current company. If the main factor of leaving is pay or flexibility, then accepting a counteroffer can work in your favor as you can receive higher pay and negotiate your flexibility while doing the things you really want to do.
Working in a place you really love not only promotes high-level productivity but allows you to stay with a company you may not have really wanted to leave behind. In this circumstance, accepting a counteroffer could be the best thing for you.
2. Are You Prepared to be Uncomfortable?
If you are someone who prefers to stay in a comfort zone, then accepting a counteroffer may be the best option for you. New roles come with navigating new relationships, new processes and systems and a learning curve. If you’re not in a personal position to expend the energy for this type of growth, a counteroffer can be your lifeline to maintaining a comfortable balance.
3. Are You Prepared to Work More to Begin a New Role?
If you have a lite and manageable workload and feel that your role is fulfilling, you may want to stay put. Was money your primary motivator for moving on? If it was and you get a comparable counteroffer, it could be a win/win. Earning a higher salary for the work you are already doing and familiar with is a benefit of accepting a counteroffer. When Does it NOT Make Sense to Accept a Counteroffer?
While we’ve outlined a few reasons above to stay with a current employer after submitting a resignation, the short answer to whether you should accept a counteroffer is almost always “No.”
Although a counteroffer can be tempting, it is hardly ever enough to overcome the obstacles that made you begin looking for a better opportunity in the first place.
Here are just THREE reasons why accepting a counteroffer is generally not a good idea.
1. The Underlying Issue is Not Solved
Chances are high that you did not make the decision to leave your job without a great deal of consideration and having voiced your issues with your supervisor. Issues such as being underpaid, feeling unappreciated, or even the unconscious sense that you just are not satisfied and making an impact with where you are at, are a few of the many reasons why you may choose to seek better opportunities. Issues such as a better salary can be an obvious reason to accept a counteroffer it doesn’t necessarily mean that it’s a permanent fix.
With pay being the leading factor for an employee to seek other options, there are two distinctive views on whether you should accept a counteroffer purely based on compensation. Many believe that pay is never an issue on its own. Still other career advisors will say that it can definitely be a stand-alone issue –including the long-term benefit of improving your salary to increase your future earning power. At some point, if you have voiced your issues to your boss, and they have not been properly addressed, accepting the counteroffer could be a temporary solution at best.
2. Damaged Employer Relationships
Accepting a counteroffer after attempting to resign from your current position could damage your relationship with your current employer and lead them to question your loyalty and dedication in the future.
According to a study published in the Harvard Business Review, “Nearly 80% of senior executives and 60% of HR leaders cited diminished trust and compromised reputation among the executives and board members of the employee’s current company.” When deciding to accept the counteroffer based on pay, employers will question whether you intend to stay loyal to the company or resign the second you receive another job offer.
Attempting to resign can also break the initial trust that was there and hinder opportunities for professional growth within the company.
3. The Benefits of New Opportunities
At the end of the day, there is a reason you decided to resign from your job, and those reasons were deal breakers. SHRM’s Tony Lee writes that “about 57 percent of all employees who accept counteroffers change companies within the following 24 months, the research shows, which raises questions about the long-term value of extending counteroffers.”
Real growth and satisfaction comes from stepping out of your comfort zone and exploring opportunities that allow you to grow both professionally and personally.
Changing companies will result in new challenges and opportunities to help you grow and build your skills. Your new company might also offer you better career development opportunities or offer you a chance to tackle a new challenge and reach a new personal best.
*The above blog is from GRS Intern Juanita Gray. Juanita is a senior at Walsh University in Ohio majoring in Digital Marketing.
For more balanced articled about Counteroffers, please see below:
https://hbr.org/2019/01/if-youre-about-to-take-a-new-job-should-you-consider-your-bosss-counteroffer