Horizon Search Inc.
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The Truth About Counteroffers

credit to Bassman Growth Advisory Partners

You’ve interviewed for a position with a new company. The company likes you! – and makes you an offer. You analyze everything: career development, growth potential, salary, benefits, and intangibles. After some thought, you decide to accept the offer.

You attempt to resign from your current company. Oops! It doesn’t go as smoothly as you planned. Your boss is upset about losing you and presents you with a counteroffer. A counteroffer is an attempt by your current company to persuade you to stay.

Career changes are tough enough as it is, and anxieties about leaving a comfortable job, friends and location and having to reprove yourself again in an unknown opportunity can cloud the best logic. But just because the new position is a little scary doesn’t mean it’s not a positive move. Since counteroffers can create confusion and buyer’s remorse, you should understand what’s being cast upon you. No doubt about it: change can be scary.

Don’t let familiarity cloud your judgment. Ask yourself whether the new position is a positive step toward advancing your career. Will it be better for you than your current position? If the answer is yes, then proceed with pursuing the position. Familiarity will follow!


         Why Companies Make Counteroffers

Some companies never make counteroffers. In others, its a fairly common practice. Consider what happens when an employee (like you) resigns:

First, morale is likely to suffer, particularly among your closest coworkers. Management will notice, and your resignation may be perceived as an unfavorable reflection on your boss. Your absence could jeopardize the progress of a big project, lead to increased workloads for colleagues who remain behind, and even mess up vacation schedules! Furthermore, it could be expensive (in terms of time, energy and money) to replace you.

A cheaper solution for the company is to make you a counteroffer. This may consist of a raise, a promotion, change in title or job description, or a combination of these factors. It may even be just a promise of change to come. Be aware that this solution may actually be a stalling technique. By buying you back, the company has bought itself some time, perhaps to finish that big project, reorganize other team members, or search for a suitable replacement for you.


         What Does a Counteroffer Sound Like?

Because your company wants to attract you to stay, a counteroffer will usually come cloaked in flattery. It may sound something like this:

But you know were right in the middle of a big project! And you’re much too valuable to the team to desert us now!

We didn’t want to tell you until next quarter, but we were just about to give you a raise/promotion to show you how much we appreciate your work. Why don’t we make it effective immediately instead of having you wait any longer?

Why, we had no idea you were unhappy with anything here. Let’s discuss this further before you make some rash decision. Whatever it is, we can work it out.

You know we have great plans for you here! But the company you’re going to work for? What can they do for you?


Why Counteroffers Don’t Work

Counteroffers can be tempting and ego-inflating. You also may detect an underlying threat that by not accepting the counteroffer, you’ll be throwing away your entire career, future, life.

Its true: counteroffers very, very rarely work. There are several reasons for this:

Trust. No matter what the company says, you will forever be a marked employee. You have demonstrated your lack of loyalty by considering another opportunity. People will feel jilted, even if you accept a counteroffer and stay. Trust and acceptance among your immediate colleagues may be irrevocably lost. Managers, too, have long memories, and wont forget your lapse in loyalty –no matter how brief it may have been.

Most likely, your basic reason(s) for thinking of leaving will eventually resurface. There are a myriad of reasons why you may have considered a change: perhaps something in particular bothered you about your position, or maybe you were presented with an irresistible opportunity. In any case, changes made as a result of a counteroffer may appease you in the short term, but rarely last for the long run. Statistics show that if you accept a counteroffer, its still extremely likely that you’ll voluntarily leave or be terminated within 6 months to a year.

While it may be true that your current company values your work, your interests and career will always be secondary to your boss’s career and way down on the totem pole compared to the company’s profit or survival. Reconsider the flattery that makes up a counteroffer: is it really about you??

If your counteroffer involves an increase in money, consider the source of the raise. Is this just your next raise, granted early? In that case, will the counteroffer simply prolong your review cycle? Remember that all companies have budgets which include strict wage and salary guidelines.

Apart from a short-term, band-aid treatment, nothing will change within the company. After the dust settles from this upheaval, you’ll be in the same old rut. A rule of thumb among recruiters is that more than 80% of those who accept counteroffers leave, or are terminated, within six to 12 months. And half of those who accept counteroffers reinitiate their job searches within 90 days

Finally, when you make your decision, look at your current job and the new position as if you were unemployed. Which opportunity holds the most real potential? Probably the new one or you wouldn’t have accepted it in the first place.

Rather than setting yourself up for the feelings of confusion and guilt that may arise when a counteroffer is presented, be prepared:


What really goes through a boss’s mind when someone quits? 

“This couldn’t be happening at a worse time.”

“This is one of my best people. If I let him quit now, it’ll wreak havoc on the morale of the department.”

“I’ve already got one opening in my department. I don’t need another right now.”

“I’m working as hard as I can and I don’t need to do his work, too.”

“If I lose another good employee, the company might decide to ‘lose’ me too.”

“Maybe I can keep him on until I find a suitable replacement.”

“You’re too valuable. We need you.”

“You can’t desert the team/your friends and leave them hanging.”

“We were just about to give you a promotion/raise, and it was confidential until now.”

“What did they offer? Why are you leaving? and what do you need in order to stay?”

“Why would you want to work for that company?”

“The President / CEO wants to meet with you before you make your final decision.”


What will the boss say to keep you in the nest?

“I’m really shocked; I thought you were as happy with us as we are with you. Let’s discuss it before you make your final decision.”

“Aw gee, I’ve been meaning to tell you about the great plans we have for you, but it’s been confidential until now.”

“The V.P. has you in mind for some exciting and expanding responsibilities.”

“Your raise was scheduled to go into effect next quarter, but we’ll make it effective immediately.”

“You’re going to work for who?”

A promotion/more responsibility

A modified reporting structure

Promises or future considerations

Disparaging remarks about the new company or job

Guilt trips

Let’s face it. When someone quits, it’s a direct reflection on the boss. Unless you are really incompetent or a destructive thorn in his side, the boss might look bad by “allowing” you to go. His gut reaction is to do what has to be done to keep you from leaving until he is ready. That’s human nature.

Unfortunately, it’s also human nature to want to stay unless your work life is abject misery. Career changes, like all ventures into the unknown, are tough. That’s why bosses know they can usually keep you around by pressing the right buttons.


         What should you do with a Counter Offer?

Ask any recruiter and you’ll hear dozens of heartbreaking stories involving counter offers. Unfortunately, more executives seem to be getting and accepting them because of the inconsistent economy. Companies are operating with reduced staff and any defections from the ranks create problems for those who remain. It’s much easier for employers to sweeten the pot to keep executives from deserting than to conduct grueling and expensive searches for replacements.

When you are ready to leave a job, you will leave. You wouldn’t accept a counter offer any more than you would let a vendor who bid high on a job make a second, lower bid to beat out the winner. Your price should be your price, period….

Try not to let the attractiveness of the new offer make you unhappy with your present position. Base your decision to move – or – not solely on the opportunity the new job represents, not on whether your present one could be better. And, since decisiveness is a trait of a superior executive, stick to your guns once you have made up your mind.


         When resigning…

Avoid any possible misunderstanding by submitting your resignation in writing (AND email).

Focus on the positive opportunity you’ve been offered with your new company. At your resignation meeting, don’t feel pressured into giving reasons for resigning. Simply state that you’ve been presented with an opportunity that you cannot pass up. An example of your resignation letter might look something like this:


(Superior’s Name)

Dear (Name):

This is to inform you that I have accepted a position with (new company).

I want to assure you of my gratitude for a rewarding professional association during my employment with (old company).

This decision was not an easy one, and involved many days and hours of thoughtful consideration, particularly with respect to my own plans for my future.  Nevertheless, the decision is final.

Please do not make this process more difficult than it need be by discussions of the reasons for my decision or whether it can be changed.

My main thoughts now are to work as hard as possible to wrap up my affairs here and to turn over my responsibilities as you direct.  However, I would like to join (new company) as soon as possible.  Therefore, I request you waive my termination notice, if convenient.

With sincere thanks and best wishes for the future.

(Your Name)

cc: President, Direct Supervisor, Personnel, Vice President, Plant Manager, any others in the chain of command above you.

(Send a copy to all hiring authorities – this will depend on the structure of the company.)

Handle your resignation right the first time you do it. Be professional and courteous, not disgruntled or weak. Offer to help during the transition time, then follow up with your best effort. 

Then, after you’ve done all that you can, move forward! Look ahead to your new opportunity, complete with fresh challenges and all the excitement that goes with the start of any journey.