The lure of the counter offer… These are indeed challenging times for employers and recruiters alike in the war for talent. With job vacancies at an all-time high and the tremendous jobs growth we have experienced over the past 18 months, it is tricky enough finding the right person for a role, let alone ensuring the new recruit comes through the counter offer unscathed.

Research that Talent2 has undertaken indicates that 54 percent of people will have a discussion with their boss advising that they are thinking about leaving their job. Therefore when these people subsequently accept a job offer and resign, their boss has already considered whether they will counter offer the individual or let them move on. Forewarned is forearmed.

As an employer recruiting a new person, it is important from the outset to anticipate that a counter offer is likely and you need to prepare your new recruit for its occurrence so that they are not surprised or thrown into indecision. Research also indicates that about 14 percent of people will definitely accept a counter offer and a further 16 to 20 percent will seriously consider the offer. So, in a worst case scenario, there is potentially a one in three chance of losing a person if the company puts pressure on them and provides them with additional enticements.

In this active job market, companies do not want to lose their employees, as they are fully aware of the impact on time and cost to the business by having to replace someone. In a tight job market, the good worker is valuable and very difficult to replace.

Interestingly, the research shows that when people make a career move it is generally not about the money. Over 60 percent say it is more about new challenges and a change. As a recruiter, the reasons that are regularly given by people considering a move are that there is no opportunity for advancement, that the culture of the organisation in which they work is not a ‘fit’ for them, that there is no one to learn from (no mentor), or that there is conflict or disharmony with their manager.

These reasons need to be uncovered and discussed at the interview stage by a new employer, before an offer is made, because when the counter offer strikes, rest assured, these factors will almost always continue to exist and a counter offer will only make conditions a little more tolerable in the short-term.

A statistic that is regularly used in the industry is that, in 80 percent of cases, the person who accepts a counter offer will still leave the organisation within six months. As an employer, it is therefore worthwhile reconsidering whether making a counter offer is worth it!

From the candidate’s side, you may have turned down a sensational opportunity, to find within no time at all you continue to be unsettled. While the lure of money is appealing, there are usually many reasons other than remuneration for leaving your job. These issues will not be resolved through dollars alone.

Employers should promote and remunerate staff accordingly without the threat of them leaving. No matter what your employer says when making a counter offer, your lack of loyalty will always have you targeted in future as a risk. The counter offer could just be a stalling tactic to give your employer more time to replace you.

The research highlighted that Gen X and Gen Y candidates are more likely to accept a counter offer, as they place a higher importance on short-term gain than their baby boomer counterparts. It is likely, however, to be a stopgap measure, they’re only staying until they can find another job that pays as well, with increased job satisfaction. When considering a counter offer, make sure to evaluate the after tax effect of an increase, because, in most cases, the extra dollars in your pocket after tax tend to be minimal and not worth compromising all your other concerns. It seems that baby boomers are less likely overall to accept a counter offer, being more determined and resolved about their move and less likely to be influenced.
Think about it. Counter offers are only made in response to a threat to resign. Is it right that you have to threaten your employer to improve your conditions? Is that an environment you really want to remain in?

In my 20 years of recruiting marketing, communications and sales positions (that’s a lot of offers), there have only been a handful of counter offers that have really been worth it for those individuals. In summary:

  • you shouldn’t have to threaten to resign to get what you are worth
  • your main reasons for wanting to leave still exist
  • counter offer is a form of blackmail
  • you will always be considered a slight risk and have question marks about you in terms of loyalty, and
  • you are still likely to leave in a few months – do it now!

Accepting a counter offer is generally a lose-lose-lose situation. The employer you have been interviewed by needs to commence their search all over again. You have missed out on an opportunity that you felt met your objectives and there is a high probability that the reasons you want to leave your job in the first place still exist. The existing employer sets a precedent that any employee can threaten to resign to improve their conditions. So when this situation occurs, be prepared, be forewarned and don’t accept the counter offer!