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How to handle the counter-offer and what to consider

You’ve been actively looking for a new job for a while now and you’ve spent hours preparing and attending interviews. Finally, you’ve received that long-awaited job offer. You can at last hand in your notice and move on. However, when you hand in your notice your manager suddenly produces a better salary and package! Known as the counter-offer!

This situation happens to recruiters all the time. We’ve spent time sourcing and selecting the right candidate, interviewing, assessing, and made the job offer. And then the dreaded counter-offer shows itself!

And, this is one of the reasons we don’t reject all the other suitable candidates before the first candidate accepts and signs the contract! Read more about how the process works here.

What is a Counter-Offer?

Let’s start with an explanation of the counter-offer.

It’s when an employee receives a job offer from another employer and then hands their notice in. When they hand in their notice, the current employer then offers to match the new salary.

The current employer will potentially offer that person a salary to match or better the salary that was offered by the new employer. They may also add more benefits or offer a better bonus potential, or promotion prospects.

Not every employee will receive a counter-offer during their career. Some will never receive a counter-offer.

The counter-offer is usually reserved for people in niche roles, roles that are in demand and supply is low, or highly profitable employees, or it may be difficult to hire a replacement and many more reasons.

Common reasons for leaving a job

Let’s now consider the common reasons people start looking for a new job.

There are many reasons people start looking for a new job; They may feel undervalued, underpaid, or generally demotivated.

Perhaps they are looking for a higher salary or there are no opportunities for promotion or progression at their current company. It may be a breakdown in the relationship with their manager and it’s time to go!

  • Lack of promotion or progression
  • Salary under the market average
  • De-motivated or bored in their current job
  • Poor leadership and culture (lack of communication, transparency, direction, or energy!)
  • Relationship breaks down with your manager (in this case, you probably wouldn’t receive a counter offer!)
    Office politics, toxic culture, bad management, etc.

The Headhunter and the Passive Candidate

There are occasions when an employee hasn’t been actively looking for another job.

In this case, they may have been headhunted by an external recruiter. This means a recruitment agency has found and contacted this person and persuaded them to consider alternative employment opportunities.

The head-hunter usually has a specific vacancy they are managing, and they will be conducting several methods to find suitable candidates.

They tend to be good at working with the passive candidate and presenting compelling reasons to consider reviewing a new opportunity.

A passive candidate is a person not active on the jobs market and therefore, hasn’t been applying direct or necessarily registered with a recruitment agency.

The passive candidate was once in demand because it was thought they were highly engaged and loyal in their current jobs, so they were likely to be highly productive.

Whether you are active or passive, it’s still a good idea to carefully consider both offers.

Flattery will get you so far

I’ve personally never received the counter-offer! It was clearly time to move on for both parties! I can only imagine that it’s an ego boost to receive a counter-offer.

However, let’s be realistic this feeling isn’t going to last.

Particularly if you were actively looking for a new job because you lacked job satisfaction, and/or some of the other reasons for leaving mentioned above.

Your day job probably won’t change. The leadership and management are not going to change overnight.

Even though some of you reading this post will like the thought of extra money in your pocket, this feeling won’t last either.

  • Ask yourself why did they wait this long to offer you a decent increase or better package?
  • Will your career suddenly be different and all the frustrations about the job and the company disappear?
  • Why are you suddenly worth more money? Is this next year’s pay rise early?

How and when to negotiate your salary?

How to handle the Counter-Offer

It’s always better to be prepared than to be taken by surprise. Think about what you are going to say, how you are going to respond, and how you are going to accept or decline the offer. There are only two options, accept and stay, or decline and go.

Take each scenario into consideration and think about the negative and positive consequences: 

Accept the counter-offer and stay in your current job: This means you will have to decline the new job offer and potentially let down the new manager.

  • You may have to deal with the disappointment of the recruitment agency and they may in turn look at re-shaping the original offer (the counter-counter-offer!).
  • Even if the offer remains the same, they are likely to re-emphasize the benefits, the employer proposition, and remind you about the reasons for leaving.
  • Remember, recruitment consultants are excellent at persuasion and they have probably prepared for the counter-offer before you even knew what it was.

Decline the counter-offer and work out your notice period: This means you will be accepting the new offer and they will be keen for you to start as soon as possible.

  • If you accept the new offer, you will not be entitled to redundancy for 24-months of service. Important to consider this scenario in the aftermath of the pandemic
  • A new joiner has no employments rights for 24-months of service (basically, this means you cannot claim unfair dismissal if they decide to let you go, or terminate your contract)
  • You don’t really know what work/life is like at the new company
  • You might be the most knowledgeable and ‘go to’ person in your current company, however, you’ll be starting from scratch in the new company

Other considerations when handling the counter-offer;

  • Always act professionally. Even if you are keen to leave and have a ton of reasons you want to share!
  • Weigh up the total remuneration, salary, and benefits (bonuses, pension, stocks, and shares, etc.)
  • Consider the potential promotions, and progression for both companies, if this an important aspect of your career

It may be worth talking to your new manager if you need clarity on any aspects of the new job offer. Be mindful of how you manage this conversation. What you don’t want to do, is worry the new manager, or give them any doubt about your acceptance.

Why you should NEVER (Never say Never!) accept a Counter-Offer!

When we say NEVER, it’s in the loose sense of the word. What we really mean is, give the counter-offer some serious thought as you did when considering to leave your current job.

Jobs mean different things to different people. There are so many reasons and factors that are connected to people’s lifestyles, values, beliefs, and commitments.

Having read several blogs on this subject, there has been a mention of the company looking for a replacement even if you decide to stay.

It’s possible your current manager will go ‘Window’ shopping to check out who’s in the candidate hiring pool isn’t a good move for the company. This move would be highly unethical and if discovered, there are certain legal risks.

However, at the end of the day, the decision is all yours. Just think very carefully and consider all the factors that are important to you, your family, and your career. 

About Dawn Moss

Dawn has worked in a corporate environment for over ten years providing Recruitment & Selection Services, and has been involved in Coaching & Educating Business Leaders, Managers and Employees in all aspects of the recruitment process.

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