Beware of the Counteroffer!

You were offered a new position with a company that will allow career growth, opportunity, and more money. After careful deliberation and much soul searching, you have accepted, or decided to accept, the new position. However, upon tendering your resignation, your current boss asks you to stay. This appeal is known as a counteroffer.

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In these days of full employment with good employees at a premium, counteroffers are the expected course of action.In order to not fall into the counteroffer trap, it's important to understand what the counteroffer is and what it means.

Counteroffers are usually made with some form of flattery:

• "You're too valuable and we need you."

• "You can't desert the team/your friends and leave them hanging (guilt trip)."

• "We were just about to offer you a promotion/give you a raise; it was confidential 'til now!"

• "What did they offer, why were you leaving, and what do you need to stay?"

• "Why would you want to work for that company?"

• "The CEO/President wants to meet with you before you make your final decision."
   

Counteroffers usually take the form of:

• More money

• Promotion/more responsibility

• Modified reporting structure

• Promises of above or future considerations, and/or

• Disparaging remarks about the new company or job, and/or

• Guilt trips

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These temptations create confusion and buyer's remorse. The FEAR OF CHANGE emotion takes over. Career changes are tough enough because you are about to leave a comfortable job, friends, location, etc. for an unknown opportunity where you have to prove yourself all over again. Fear of change will cloud the best of logic. No matter how good the new opportunity is, it is just usually more comfortable to stay. Remind yourself why this new opportunity intrigued you in the first place and picture yourself a year from now; are you in the same position or did you take the new opportunity?

 

Of course, we all think we are irreplaceable and want to believe all the flattery, but beware! Accepting a counteroffer or appeal to stay is typically the wrong choice to make.

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Think about it. If you were worth "X" yesterday, why are they suddenly willing to pay you "X + Y" today, when you were not expecting a raise for some time? Could this perhaps be your raise for the next few years? That has been our experience.

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Employers do not like to be fired. Employers are most concerned that they may look bad and this could jeopardize their career because they are judged by the ability to retain staff. When a contributor quits, morale suffers. Further, your leaving might jeopardize an important project, cause a greater workload for your boss, or foul up a scheduled vacation. It's never a good time for someone to quit and it may prove very time consuming and costly to replace you, especially considering search and relocation expenses. It is much cheaper to keep you even at a slightly higher salary. And, it would be better to “let you go” later, on the company's time frame

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Most employers will tell you that a counter offer is usually a stopgap measure because they couldn't afford a defection at that point in time. They do not count on those people long term and usually a person who accepts a counter offer has burned bridges two or three levels up, if not with their immediate manager. It puts them in a career holding pattern. Many times immediately after a counter offer is accepted, the employer is looking for your replacement ASAP.

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It's not about you. While your employer may truly consider you an asset and may genuinely care about you personally, you can be sure that your interests are secondary to your boss's career, and your company's profit or survival. In other words, flattering offers and comments are attempts to manipulate you to do something that is in your employer's best interests, and not necessarily yours.

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The negative ramifications to accepting a counteroffer are numerous:

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Where did the money or responsibility come from? Was it your next raise - just early? Will you be limited in the future? Will you have to threaten to quit to get your next raise, or might your (cheaper) replacement be sought out ASAP? One client executive, who preferred to remain unnamed, commented that "90% of the time, accepting a counteroffer is the wrong thing to do. If the business is so dependent on one person, it's a weak business.".

 

You'll never be considered a team player again. You've demonstrated your unhappiness, or your lack of blind loyalty, and will be perceived as having committed blackmail to gain a raise. Many employers will hold a grudge at the next review period, and you may be at the top of the next Reduction-in-Force "hit list". Someone once described it as, "Like an adulterous affair that has been discovered, the broken trust in never fully recovered."

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Statistics show that more than 80% of those accepting counteroffers leave, or are terminated, within 6-12 months. Apart from a short-term Band-Aid treatment, nothing changes. The reasons why you started looking are still there. After the dust settles, you'll be in the same old rut. Although counteroffer acceptances are discouraged, 50% of those who did succumb re-initiated their job search within 90 days.

 

A counteroffer demonstrates disrespect for your decision and commitment to the new company. Should your current employer decide to eliminate your position, or skip you for promotion, just try to counter and change their mind. Not very likely! You've committed to the new company, which has made plans and accommodations around you. They are counting on you to stand by your word. Everyone will respect your decision and integrity, and if the previous employer was sincere about your value, they'll likely make a spot for you in the future.

 

Look at the two opportunities, your old job and the new position, as if you were unemployed. Which holds the most real potential? Probably the new one, or you'd not have accepted it in the first place.

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Two things are certain:

    1. You can expect a counteroffer, and

    2. You should hold a steady course from the beginning, and stick with your decision to move on to a bigger and better future.