Why say “NO” to a counter offer?

What is a Counteroffer? A counteroffer is a proposal made by a company attempting to retain an employee who submitted a resignation. A counter offer can be a delicate situation and requires careful consideration.

Organizations suffer a significant void when an employee leaves, so counteroffers have become quite common. It makes sense to want to keep you. After all, they hired and trained you - made an investment in you; now they will have to find someone to replace you. A new employee search will require valuable time and resources. Training and developing a replacement will result in lost production and revenues until the employee is able to reach your competency level. The timing of your resignation will place them at a disadvantage. So, they want you to stay -- at least until they can find someone who can perform your duties for a salary less than what they had to offer in order to keep you.

Conventional wisdom dictates that you should never accept a counteroffer. Counteroffers serve as a Band-Aid on a chest wound. Generally, accepting the counteroffer will not heal the root of the problem. Examine your initial reasons for wanting to make a change; often the reasons people make job changes are for issues other than money. If this is the case, then it is likely you will return to those same issues if you accept a counter offer, after the initial glow of more money and feeling appreciated by your current company wears off.

There are always some risks in going into a new position with a new organization; however, there are also risks in accepting a counter offer. Depending upon the relationship you have with your manager and/or management team, and the corporate culture (values, attitudes, etc.) at your present company, accepting a counter offer could change how you are viewed. There is the possibility of being seen as disloyal (they will never trust you again), and if the outside offer came at a very crucial time — say, when losing you would have been disastrous to a vital project or the bottom line — you may cause some animosity if the employer feels there is no choice but to counter offer to keep you on board.

These feelings could pass in time, but it is also possible for you to be targeted for replacement (or passed over for promotion, important projects, etc.) at a time when it is more convenient for your current employer. You will constantly be looking over your shoulder. Anyone in the company who suspects or knows you were giving notice will now want to know why you didn’t leave.

We asked a Human Resource professional to comment on how she responded to a counter offer acceptance. Her response was quite interesting, and not surprising:
From any one that handed in a resignation that we gave counters to was only given a counter to buy us time to locate a replacement. Then we found a way to either discharge or demote the person. Usually within 6 months, sometimes less.

1) Once a we knew a person was looking, they were put on the top of the list for lay off in our contingency plans
2) Once we knew a person was looking, our faith in their company loyalty was diminished and many years passed before we regained faith in them
3) Sometimes we would counter with a title of “special project manager”, which allowed us time to find a replacement. Once the “special project” was completed, and there weren’t more “special projects”, we could lay him off.
4) If the promotion is to fill a current opening…….that’s one thing. however if it’s a new position, then your old position will need to be replaced and once that happens, then again it creates opportunity for elimination of your new position. (“sorry, we didn’t budget for this position”)
5) Once a counter was accepted, the next annual increase was either not given or given at a very reduced amount (sometimes it went 18-24 months)
6) Once a counter was accepted, the annual bonus was not usually given or given at a reduced amount
7) Once a counter was accepted, it gave us the indication that the person could be bought.
8) Once a counter was accepted, it told us that this person was not strong and could not stand by their decisions. The company lost respect for them and felt they could be manipulated.

If you have already accepted an offer from the new employer, it is often considered somewhat unethical to withdraw your acceptance based upon a counter offer from your current employer; however, you still have to do what is right for you.

In the end, after weighing all the factors and perhaps discussing them with family members, close friends or a mentor, you will need to make a decision. Ultimately, you need to do what is in your best short- and long-term interests. However, we have found that 82% of those people who accept a counter leave their employer within 6 months, either by their own volition or by the company’s manipulation. Sad, but true.