Counter offers happen regularly but they rarely work out for the best. In fact, studies from the Wall Street Journal show that 85% of employees who accepted a counter offer, left within 6 months. If you aren’t familiar with the term, a counter offer occurs after you have handed in your resignation and your current employer offers you an incentive to remain with the company. Although tempting and flattering, we would advise you to seriously consider the following. Here’s why:
It is unlikely that you were planning to leave on a whim. Whether you were looking for career opportunities; a higher salary or more flexibility in your current role, it is more than likely that you have already approached your manager previously about addressing areas that were of concern to you. If they have previously been unwilling or unable to meet your requests, you need to ask why they can suddenly adjust your work environment if they couldn’t before.
It could be an increase in remuneration, a bonus or a new job title. Essentially you need to remember that your employer most likely does not want to start the search to replace you for a number of reasons. The added pressure on remaining team members if the position is vacant for an extended period; a loss of productivity as they search for someone new to join the team and come up to speed and the likelihood that the team dynamics will change with a new team member.
Too often in Sydney’s accounting market, employers try to keep valued employees who have just tendered their resignation by throwing money at them as an enticement to stay, but mostly it is too little too late. As an employee, you should ask yourself why it took the extreme act of searching for and finding a new job for your employer to increase your salary. Is this what you have to go through every time to ensure you are being remunerated fairly?
In truth, it is in your employer’s best interests to pay you fairly and at market rate throughout your tenure versus dealing with the last-minute, knee-jerk reaction of a counter offer.
If you accept the counter offer and decided to stay, will it damage the working relationship between you and your manager if they know you have been looking elsewhere?
Be honest with yourself and ask whether the counter offer addresses your original reasons for leaving. Only 3% or less of people who accept a counter offer, remain with the company longer than 18 months*. This is usually because the underlying reason that motivated them to leave in the first place was not addressed.
So if you are faced with a counter offer, we recommend that unless it satisfies the reason why you started your job search in the first place, smile, be thankful and politely decline. After all, it’s important to remain professional and you want to be able to leave on a positive note with strong references.
*Wall Street Journal Study