Avoiding the Downfall Counter-Offers: Why Do They Fail 90% of the Time?

You’ve made the leap and thrown your hat in the ring for a new job. It’s been a long time coming and you are finally ready to move to the next level in your career. The only thing left now is to hand in your letter of resignation. But right as you do, they throw a counter-offer at you. Now, you’re stuck between a potentially great future and a renewed hope to stay with your current employer.

If you have ever had to navigate a counter-offer from an employer, you know how tempting it can be. While it may seem like you’re in high demand (which is only sometimes the case), the truth of the matter is that accepting a counter-offer is a backward step in your career path. As a recruitment agency and staffing solutions provider, we deal with candidates all the time who are struggling with this decision.

That’s why we wanted to walk you through everything you need to consider when it comes to counter-offers. In this article, we will talk about what a counter-offer is, what happens when you accept it, and last but not least, key reasons why you should not accept a counter-offer.

Table of Contents

What Are Counter-Offers?

A counter-offer, as the name suggests, is an offer made by the current employer to counter an offer that you might have received from a new potential employer. They might offer you a better salary package, a more senior role, better benefits, or all of the above, in the hope of retaining your services.

The concept of such an offer isn’t the most interesting part, rather, it is the statistics surrounding it. Did you know that approximately half of all candidates (50%) do not negotiate for a higher salary when they apply for a new job? They are either satisfied with the job change itself and don’t care about more pay, are worried if they do ask they won’t be selected, or are uncomfortable asking for more.

Should You Accept Counter-Offers?

While it may seem like a great idea to leverage your position to get a better position in your current company, the numbers tell a different story. According to an article by the Harvard Business Review, which referenced a study by CEB, a Washington-based best-practice insight and technology company, 50% of employees who do accept a counter-offer leave within 12 months.

Another article by Medium correlated this data with their own research, wherein they found that approximately 48% of counter-offer accepting employees left within a year.

When they revisited the numbers, 92% of all those who had accepted such an offer left the company within 36 months.

As Marcellus from the play Hamlet says, “Something is rotten in the state of Denmark. It is clear that counter-offers are not the solution for the majority of employees who want a better career.

Many candidates who leave their present companies, namely the ones who accepted a revised offer, claim that there are pain points in the underlying issues that prevented them from staying. Things like a vague career path, micro-management, a less-than-stellar work culture, and so on, were some of the main reasons. If there is one thing we know for certain as a recruitment firm, it is that throwing money at these problems will not solve them.

The Top 5 Reasons to Not Accept Counter-Offers

For the most part, we went over why counter-offers don’t work out, but what are the consequences of accepting one? Taking up such an offer from a previous employer may prove to be more trouble than it’s worth in the end. Here are some reasons why you don’t want to go down the path of accepting counter-offers.

Reason 1: It Puts a Target on Your Back

When presenting you with a counter-offer, an employer may be sympathetic to your situation. But, it’s not unusual that friction comes into the picture once they know that your resume is on the open market. It may be subtle or obvious, but it will be there in certain ways once they know you are looking to secure an exit. They will always question your loyalty.

“You got to go down a lot of wrong roads to find the right one.” – Bob Parsons, American Entrepreneur and Founder of GoDaddy Group of Companies.

Reason No. 2: Things Might Not Improve

Carrying on along with the previous point, the friction between you and the company could cause certain issues to resurface and even aggravate them. These would likely be the same reasons for which you wanted to leave in the first place. Accepting a counter-offer means you would likely fall right back into the same position you were in, but with higher pay.

Reason 3: Your New Employer Sees Your Value

At the end of the day, you shouldn’t have to threaten to leave your job for the employer to see your value and give you that raise or promotion you wanted. Ask yourself: why weren’t you worth that effort before the offer? The fact remains that the new employer sees that potential in you and knows the value you bring to the team. They are prepared to offer you the benefits, work culture, and pay right off the bat. Accepting the counter-offer means you give it all up.

Reason 4: It Affects the Team Dynamic

If you knew a co-worker wanted to leave, would you want to plan a 6-month work project with them where mutual dependency plays a role? Once you take up a counter-offer, things won’t ever really be the same, and that’s just the reality of it. This can also affect the social dynamic, as it would be hard for co-workers to form a bond with you outside of the workspace, knowing that you might leave in the next few months. Morale, productivity, work culture, communication, and so on, all take a hit.

Reason 5: You Risk Burning Bridges to a Better Future

No company wants to support you until you’re near the finish line, accepting a job offer, only to lose you to your current employer. By accepting a counter-offer, you risk burning bridges to future opportunities with that company. And, if you are doing it through a recruitment agency, the message you’re sending is that you are not ready to make the jump. Neither is a great option.

To Sum Up

When all is said and done, there is only a very slim chance that accepting a counter-offer ever works out in the employee’s favor. The data tells us that 9 times out of 10, even if they do, employees ultimately end up leaving the job for something better.Regardless of the salary hikes or the benefits, a counter-offer does nothing to fix the core issues that you were seeking to leave behind in the first place.

As recruiters who have been working in the industry for close to 20 years, we know one thing for certain; You should factor in all of the varibles of why you were looking at alternate employment in the first place and consider the risks associated with accepting a counter-offer. The mind-blowing numbers don’t lie.