Should You Accept a Counter-Offer?

As professionals, we all aspire to grow and advance in our careers. At some point, this journey may lead us to explore fresh opportunities beyond our current organisation. However, the decision to part ways with a job is not always straightforward, particularly when your current employer presents you with a counter-offer, enticing you to remain. In this article, we delve into the realm of counter-offers, seeking to comprehend their implications and navigate the challenging decision-making process they bring.

What exactly is a Counter-Offer?

Before we start, let’s clarify what a counter-offer is. A counter-offer is an offer your current employer makes in response to another offer. You’re most likely to receive a counter-offer after you've handed in their notice, and it basically means your current employer is trying to keep you from leaving their company (isn’t that nice). A typical counter-offer could consist of higher salary, better benefits or more career progression opportunities.

89% of employers believe people leave just to get more money. In reality, only 12% of employees leave due to salary alone. 

Source: OfficeVibe 

Let’s play the following scenario in our heads. You’ve been with your current company for a couple of years, the work isn’t very challenging or inspiring, and you haven’t had a salary review in a while. You start to wonder if the grass is greener on the other side. so you start looking for a new job, speak to a few recruiters, and discover you’re being underpaid. After several months of interviews and job hunting you finally get the offer you wanted. You even managed to negotiate a higher salary and benefits package - Hurray! I bet you feel great and excited about the new chapter. 

Next step - hand in your notice (this can be very stressful for a lot of people - trust me I’ve been through it). The moment has come, you gather your confidence and ask your manager for a meeting. Now they are sitting face to face with you and your heart is pounding. You tell them that you found a new job which pays better and offers better career opportunities. You think it’s all done but wait! Not so fast… in a panic they blurt out “We’ll match your new offer! Why didn’t you come to us before and say something?”. Well that was unexpected - I’m sure most of you will feel flattered and slightly taken aback by their response. But they are not done yet with the compliments... you’re a valuable member of the team, you have a bright future ahead of you, the team needs you, your customers love you, you’re doing such a good job working on project X and I’m sure you’re up for a promotion soon... You sit there confused and maybe even feeling a little silly for having looked for a new job in the first place. Clearly you misjudged them if they think so highly of you. You’re unsure what to do and your mind is racing. 

Should I stay or should I go? 

This chat could end in 2 ways. You either kindly decline the counter-offer straight away or you feel so conflicted you need time to think about it. I’m sure a lot of you will take a few days, look at the pros and cons and ask family and friends for advice. Again, this part can get extremely stressful because you will hear a lot of opinions from either side. You’ll have your current employer on one shoulder and a recruiter or new company on the other - each side playing with your emotions in an attempt to convince you to take their offer. Add your family and friends to the mix - who are unlikely to know the full picture - and things can get complicated!

But what is the right decision and what should I do?

If you feel conflicted and are unsure what to do that's only natural - there’s a lot to consider. My advice - sit down, take a deep breath, make yourself a hot drink and put your emotions to one side. Really think about what made you decide to look for a new job in the first place. Are there any underlying issues apart from money - lack of career progression, long commute, company culture, empty promises, terrible work/life balance, job security, poor management style, not fulfilling work, or no recognition? If you’re struggling to visualise the pros and cons, or emotions are clouding your decision, we’ve built a useful tool which lets you compare different career opportunities - you can try it for free here. The tool is based on my experience of being in this exact same situation, and helps to compare the benefits of each option in an impartial way.

If you’re wondering what other people value, the team from Reed have put together some great analysis - they tracked 3 years worth of data and these are the most desired benefits:

1. Annual Leave/Paid time off - 65%
2. Health Insurance - 51%
3. Performance bonus - 48%
4. Annual Salary increase - 45%
5. Higher Company Pension Contributions - 44%

Discount on brands, Vision Insurance, Company mobile phone and Gym membership have scored the lowest - all under 10%. 

40% of people would want hybrid working arrangements in their next job. 

Source: Reed

It's clear that everyone has their own preferences in a job. If your reason to look for a new job was solely money related and you love your current company and colleagues, then you are most likely to accept the counter-offer because it's the easiest option. However, if there are more underlying issues and the new company matches what you’re after in terms of career development, job title, type of projects, cultural fit, working arrangements and work/life balance, take the leap and take it. You have to look at the bigger picture and put yourself first.

What are the most common reasons for people to leave? 

Looking at the most common reasons why people leave their current job, ask yourself how likely are you to get promoted soon, will the management style improve overnight (spoiler: most likely not), will they offer you the development opportunities you have been asking for, or would you get more recognition? 

A study by Gartner (former CEB Corporate Leadership Council) shows that salary isn’t everything, and the top 5 reasons for leaving are as follows (employers take note!):

1. Future Career Progression - 42%
2. Compensation - 36%
3. People Management - 35%
4. Development Opportunities - 31%
5. Recognition - 29%

Source: Gartner

Take a minute and consider these factors in your current situation - how many would actually improve? If you come to the conclusion that nothing will change in the long term, try to decline their counter-offer in person and leave on a positive note. Tell them your reasons, and offer to do a thorough handover and potentially help with the interview process to find a replacement. 

What if the new Counter-Offer is so much better?

Again, look at the bigger picture and go through the list of factors you made - if you need help visualising things, you can access our Job Comparison Tool here. If you have uncovered underlying issues then money won’t fix it - especially not in the long term. Research has shown that only 12% of employees are leaving due to money. However, 89% of employers assume that leaving is money related and believe matching your new offer will fix everything. Either employers think their company is amazing or they are just completely oblivious to how their employees are doing (which do you think it is?). 

Why did they make me a Counter-Offer?

I am sorry to break it to you but it’s purely to protect their business and nothing else. 72% of businesses know how challenging the current market is. Depending on how long you’ve been with them, you would’ve built strong relationships with not only your peers but also with customers and clients, as well as the knowledge you’ve gathered over the years - priceless. 

“72% of businesses said that it’s been harder to find people with the right skills than in 2021.”

Source: Reed

In the current market, it is extremely difficult and costly to find a replacement. You’re wondering why? Here’s a breakdown of the cost to replace you:

• Advertising the role on several job boards, 
• Using a recruitment agency (fees are usually 15-35% of the candidate's annual salary), 
• Time lost in going through applications, setting up several interview stages, going through offer stages, waiting for the new person to start. 
• 3-6 months for a new starter to get settled in, get to know the clients and company strategy (depends on the role and level of experience)
• If things don’t go to plan, the new person might even leave after a few weeks and the whole search starts again. 

Let’s recap, from you telling them you’re handing in your notice to the new person sitting at their desk, it can easily take 6-12 months. Once you add everything up, it can cost the company quite a lot to replace you - all of a sudden a 10-20% raise doesn’t sound that bad anymore. 

If the Counter-Offer sounds too good to be true, that’s because it is.

Source: Your gut feeling

As a word of warning - most business owners will know that a counter-offer is only a quick fix and they might even look for a replacement for you in the background. If your salary is increased a lot relative to your job role, you might be next in line for replacement if they need to downsize in the future. At the end of the day, business is business - they won’t hold onto you if it doesn’t make them money.

Should I accept the Counter-Offer and see if things improve?

Hypothetically, if you accept the counter-offer, understand that 52% of people will leave after just a year and 92% will leave within 36 months. Why? Because of the good old underlying issues we talked about earlier. Money won’t fix poor management, the non-existent career progression or cut your daily commute in half. They will also make empty promises to buy themselves a bit more time (we’ll have a salary review in 3 months - sound familiar?). 

You might be surprised that only 52% of people that leave after a year. A lot of recruitment agencies claim that 80-90% of people that accept a counter offer leave after a year. Sorry to tell you this but recruiters might be somewhat biased on this one - there is no way that a recruiter benefits from someone taking a counter-offer. After many days of research for this article, I still haven’t found a reputable source for the 80-90% number - just recruitment agencies referencing other recruitment agencies. In reality taking a counter-offer is going to depend on the situation and it might make sense for you, as it does for almost half of people that receive one.

During my time as a recruiter, I saw my fair share of counter-offers (and even got one myself) - some candidates declined and some accepted. I stayed in contact with the candidates who decided to stay in the hope that things might improve, and most of them told me it didn’t. Everything seemed great for the first couple of weeks but not much had actually changed outside of their salary - some of them even felt pressured to do more work. In the end, they went back to the job hunt. 

Are there possible consequences if I do accept the Counter-Offer?

Taking a counter-offer will most likely impact your working relationships - a study shows that 71% of Senior Executives and 67% of HR leaders would question your loyalty going forward. Ask yourself if things would really change. I’m sure you would see some sort of improvement for around 2 weeks but things will go back to normal and you will feel disappointed and wish you would’ve taken that job offer. 

Put yourself in their shoes. You’re the owner of the company and one of your employee's hands in their notice. Would you not second guess their loyalty?

Should I tell the new company that I received a Counter-Offer? 

Yes, but be cautious - it can depend a lot on where you are in the process. You could use it as a negotiation tactic but only if you haven’t signed the contract yet. Going back and asking for more money or a better benefits package after you signed the contract will only leave a bitter aftertaste in your new manager's mouth. The new company might offer you slightly more money or flexible working arrangements but at the end of the day, they want someone who is excited and committed to joining their team. So be careful with that approach and see if it’s worth the risk. If you do work with a recruiter, ask for their advice. 

Should I just pretend I received a Counter-Offer and ask my current employer for more money?

Okay, we are stepping into dangerous territory here. Please don’t ever do that as it could backfire immediately. Not only would you lose your current employer’s trust, but you might even lose your job as well. Don’t play with fire. If you’re unhappy, just look for a new job. 

I’ve decided to accept a Counter-Offer - now what?

If you decide to accept the counter-offer, you went through all the pros and cons and you’re happy with your decision - contact the original company or recruiter straight away. I would suggest emailing the hiring manager and thank them for their time and the kind offer, but let them know you’ve concluded that the timing isn’t right. Try and stay in touch with the hiring manager (connect with them on LinkedIn) - you never know what might happen in 6-12 months time.

If you worked with a recruiter and declined their offer, be aware that they might not be impressed by your decision. Some will understand your reasoning and want to keep in touch, others will tell you you’re making a big mistake (which might be true) and you might ruin your working relationship with that particular recruiter. 

I declined the original job offer but they Counter-Offered me too!

Yes, this could really happen - especially if you’re working with a recruiter. Depending on how much the company liked you, you might get the elusive counter-counter-offer. Is your head already spinning?

It is not uncommon for candidates to accept the counter-counter-offer from the new company but be aware once you’ve accepted the offer, stick with your decision! Telling the news to your current employer will be painful and don’t expect them to understand. They most likely will be very disappointed and you have lost their trust. Any further counter offers are very unlikely to appear and people might feel you’re starting to waste their time.

To Summarise

Handing in your notice is never easy and even harder if you receive a counter-offer. They might sound nice at first but make sure you really think it through and put your emotions to one side.

If your reason to look for a new job was solely money related and you love your current company and colleagues, then you are most likely to accept the counter-offer because it's the easiest option.

However, if there are more underlying issues and the new company matches what you’re after in terms of career development, job title, type of projects, cultural fit, working arrangements and work/life balance, take the leap and take it. You have to look at the bigger picture and put yourself first.