Blog Img

Danger: counteroffer ahead

Back to Articles

The drastic changes in the workplace since the global pandemic have shifted the focus on how we view work, flexibility and work/life balance. Despite being initially forced to work from home, the majority of employees have proven that productivity and communication can be maintained working remotely. As such, they now want to retain the option to continue either remotely or in a hybrid working model – so much so, that many will consider changing jobs for it. Nothing to worry about there from a recruiter’s point of view, of course, until you factor in a renewed emphasis on retention for employers that will see the rise of the counteroffer in a last-minute bid to hang onto key talent. 


A counteroffer is widely regarded as a weak tactic. From an employer’s point of view, an unexpected resignation can feel like a real kick in the teeth after potentially significant investment in the training and development of an individual. The majority of the time, compensation is cited as one of the reasons to leave, but it’s rarely the genuine root cause. Top performers don’t quit to get a pay rise, so counteroffering is usually a waste of time. The very best talent wants to stretch themselves, take on more responsibility, and advance their careers – and if an employer hasn’t allowed them to do this, then it’s already too late. 


At the moment of resignation, an employee must have been interviewing, often with direct competitors in the same space for weeks, if not months. That means they’ve met other people, bonded, possibly met their future teams, and been through an offer and negotiation process. And all that time, they didn’t feel that they had a strong enough relationship with their current employer to discuss contracts, compensation or any other reason to leave. Even if they do fold and accept a counteroffer, there’s no guarantee that they won’t leave anyway a few months later (almost 90% leave within a year). 


From the employee angle, a counteroffer is an unpleasant situation to be put in. If compensation was mentioned as part of any resignation discussions, it can be uncomfortable to follow up with new (or the real) reasons in the face of the counteroffer. Accepting the offer is a particularly bad idea. A resignation letter, even if rescinded, will have effectively signalled an intent to leave. The farce of accepting a counteroffer may play out with handshakes and smiles all round, but the reality is that the employer now knows who they’re dealing with and can start the process of finding a replacement or transitioning the role elsewhere. Word travels fast, both internally and externally, and an employee’s reputation can be damaged by interviewing elsewhere then ultimately accepting a counteroffer. 


As recruiters, we have plenty of experience in helping our candidates navigate the counteroffer and we will no doubt be reiterating these points to them in the near future:


  • Anticipate a counteroffer: it happens all the time, so don’t be thrown off course

  • Don’t be flattered: any salary increase offered is a fraction of the cost of recruiting and training a new hire

  • Don’t think any problems are solved: the employer is merely buying time to replace you now that they know you want to leave

  • Remember why you’re in this position: it was never just about the money

  • Talk to your recruitment consultant: you need someone in your corner throughout the resignation process