A counteroffer is both a flattering and confusing situation for an employee. On one hand, a counteroffer means that the current employer believes you’re an asset to the company and wants to offer you more money to stay. On the other hand, a counteroffer can trap you in a job that you want to leave. Looking at the full picture of a counteroffer is the only way to make a decision according to your best interests and to choose the company that will further your economic and professional future.
What Is a Counteroffer?
As the name implies, a counteroffer is an offer made in response to another. In terms of employment, a counteroffer is a common employer response when an employee puts in his or her letter of resignation. A company may give a counteroffer to try to convince the employee to stay. This may include a pay raise, promotion, more vacation time, or another such benefit that the employee wasn’t receiving before. A counteroffer is a common response to an employee switching companies. The current employer may try to offer more money/benefits than the employee will receive at the new job.
An employer may give a counteroffer after realizing the impact of your departure – the costs of training a new hire, transferring your workload until the new hire is ready, scheduling changes, and the potential annual bonus repercussions of worse turnover statistics.
Counteroffers from the Employer’s Point of View
It’s important to look at a counteroffer from your employer’s point of view before accepting. Your employer no longer sees you as a loyal, satisfied employee working hard for the best interests of the company. Instead, you’re an employee who has invested significant time into finding an employer, proving yourself during an interview, and negotiating terms with a new employer.
Your employer knows that a letter of resignation means you’ve formed attachments to the other employer and may have mentally switched alliances. Your employer also recognizes you as a potential competitor with insider knowledge about the way the company does business. You could potentially use this information against the company.
Furthermore, your employer may be wary of trusting you in the future. You’re now marked as a flight risk, and the employer may look for replacements even after you accept the counteroffer. This is why it’s important to carefully consider your options before accepting. There have been plenty of cases where the employee says yes to a counteroffer only to be fired months later when the employer finds a suitable replacement. At this point, the employee has lost the opportunity for employment with the other company.
JSK Recruiting can help job seekers understand counteroffers and know whether or not to accept them. Learn more on the subject of counteroffers in Part 2 of this article.