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Caught in a Tug of War?

How To Handle A Counter Offer from your Current Employer

Counter Offer

In my 35 years of recruiting, I can't remember a happy ending to a case where an individual resigned and then accepted a counter offer to stay at his or her current employer. Why is that? Counter offers usually don't address the underlying reasons why people want to leave their current positions.

Individuals change jobs for a variety of reasons. Their current role may lack intellectual stimulation, career development or progression opportunities. He or she may lack a cultural fit with the manager or organization. Or the executive may be tired of a long commute or an intense travel schedule and want a better work-life balance. Compensation is usually the last reason people leave their current positions or not even a factor at all.

Compensation is usually the last reason people leave their current positions or not even a factor at all.

Ironically, counter offers are almost always only about money. Companies may match or even go beyond the new offer to try to convince the person to stay. However, most other "promises" to address the driving force behind the decision to leave are simply "false promises," and the reasons the employee had for searching for new employment in the first place do not go away.

If the reason was cultural fit, the company will rarely change its organizational structure or culture for one person. Even if management sincerely wanted to, effecting organizational change is a challenge that takes a great deal of time and effort. If the reason was lack of intellectual stimulation or professional development opportunities, the company would have promoted the person before he or she resigned and on its own terms.

According to one 2018 survey, 58 percent of managers make counteroffers to retain employees who receive job offers from other employers. How long do employees who accept a counter offer stay with the company? "Less than two years," was the average response, according to the same survey. Counter offers are nothing more than a quick fix—a band-aid that gives a company time to assess the situation and determine the best action to take. Ultimately, the end result is often the same: the person is replaced or leaves.

Counter offers are nothing more than a quick fix—a band-aid that gives a company time to assess the situation and determine the best action to take.

If you are the recipient of a counter offer, be aware and follow your gut. If your instinct is to leave for another opportunity, stick to your decision and go. Be excited to look ahead. Of course, resign with grace and always keep the door open, as we've written about before. Sideline any objections with a clear and confident explanation that covers where, when and why you are leaving. Once you make the announcement, you are basically past tense in the eyes of the organization, but you will always be remembered for how you left. Keep all bridges intact. Times have changed over the years; and it is now acceptable to return to a former employer in a more senior role after having gained additional experience elsewhere.

If you are the employer contemplating extending a counter offer, be sure to think through the long-term implications. If you really desire to retain the individual for the long term, how will a restructured role or compensation package effect the organization? Will it positively or negatively impact your succession planning process? Will it upset internal parity? Can you sincerely address the fundamental reasons that caused the person to resign in the first place? If not, then congratulate the individual and keep the lines of communication open. This way, if an opportunity presents itself at some point in the future for the person to be invited to come back, he or she may do just that.

Article updated September 30, 2019

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Jane Howze

Jane S. Howze

Managing Director