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The impulse decision

Accepting a counter offer, can be compared to an impulse purchase at a store. You know which items you need to purchase but you may just stumble across something in the process of purchase and with little research, understanding or knowledge of the item, you chose to purchase it anyway. Often this will result in you regretting your decision and returning it.

This is exactly the same with a counter offer. You know why you want to leave your current place of employment and you have given it enough thought to make an informed decision. However, when presented with the counter offer the psychology behind it, is that you feel valued again, needed and the offer itself is often very attractive as well. However, the real issue does not go away.

The downfall of the counter offer

The counter offer mostly does not address the initial reasons for wanting to leave. Most of the time, the only aspect, being offered, would be a higher salary. This sounds very attractive for many and is often a convincing factor. You may thus make the decision to stay. What you don’t know though, is that you will very likely find yourself, sitting in that exact same chair, in front of your employer, with your resignation letter once again. The reason for this is, as statistically 80% of candidates who accept a counter offer from their current employer end up leaving within 6 months. Looking at this with a 12 month mark, 90% of employees who accept a counter offer leave their current employer within the twelve-month mark.

The sad part to this is, that you will need to conduct the whole recruitment process again and seek a new opportunity. Often people forget the value of a new opportunity and dare we say “take the easy way out” by accepting a counter offer. The comfort zone however is a dangerous place, it prevents new growth and opportunity. The new role you would have found, was one that would have solved your previous problem, the problem that led to you leaving your employer in the first place. If the reason for leaving was financial, then of course often a counter offer will be a good solution. However, most of the time, the problem is not just monetary but consists of various other factors such as continuous travel, limited growth or very often just not feeling challenged anymore. We have found that being challenged is a big motivator for many and is always an aspect our candidates seek for in their next job. A counter offer will not solve this issue and thus within 60 days you will very likely be part of the 50% of counter offer accepting employees that will once again be on the lookout.

Important factors to consider when presented with a counter offer

Your work relationship with your boss will never be the same again and likely with your co-workers too.

Often, the pay increase offered to you, is a pay rise you would have received soon. This means, that you will not be getting a pay increase for quite some time as companies have strict wage guidelines that they need to adhere to.

The issues you had initially will return and you will find yourself in the same situation.

Future promotions may be impacted, as you may not be recognized as a long-term employee anymore and thus also won’t be rewarded as such. This has an impact on your career development.

Why do employers offer counter offers although the likelihood of the employee leaving again is so big?

Money, money and once again money.

Did you know, that it can cost an employer as much as 213% of an annual salary to replace a senior executive? This % would surely motivate anyone to offer a counter offer. Employers want to of course avoid or at least be able to prepare themselves for this cost. Thus, paying an increased salary to retain the employee is nowhere as big of a cost as it would be to replace the employee.

Of course, the employer knows that this is a short-term solution, but it does give the employer the time to prepare for the cost that is yet to occur.Counter offers are really very common within employers and some will offer counter offers that are shocking.In fact, they are so common, that 62% of employers claimed that they have offered a counter offer. This means that only 38% of employers reported not having made a counter offer.

Our advice to you

We are by no means advising you to completely disregard the counter offer, as it can very well be an ideal solution for you. What we are however advising, is that you always remember your reason for leaving and whether those issues are being solved in the counter offer. If not, does it really make sense turning down a role that resolves issues you had in your prior role and could lead to you enjoying your job instead of dreading it every day?

We will let you answer that yourself.