To Take or Not to Take — a counter-offer?

If you put down ‘counter-offer’ in google search, you can easily find a dozen of articles telling you why you shouldn’t take a counter-offer. These articles are very likely to be produced by recruitment specialists. You started to think, recruiters hate people taking counter offers because they are protecting their own interest. Taking a counter-offer from your employer couldn’t be that bad. In fact, if financial reward is the reason why you wanted to seek changes, taking a counter-offer from your current employer is a very sensible option. What’s more, you can stay in a very familiar work environment. It is the company making the changes, not you. You feel very flattered.

You choose to be oblivious to the statistics:

·         50% of the candidates who accept counter-offers are actively searching for a new job within 60 days;

·         80% of the candidates who accept counter-offers end up leaving within 6 months.

Or you choose to approach these statistics positively thinking you will be in a better position to negotiate with future employers after accepting the counter offers. But, is that true? Before we find out, we have to understand why counter-offers are extended in the first place.

While counter-offers used to be more common in professional services sectors, it is increasingly common across the post-covid labour market where labour shortage is acute and skilled candidates are re-evaluating their career prospects and priorities. Employers like to tell you that you are indispensable to the organisation, but there are obvious reasons why they are willing to give you a better package just because you handed in resignation —finding replacement is costly. Statistics shows that it could cost as much as 213% of annual salary to replace a senior executive.[1] The training cost, loss of productivity while finding a replacement, and the risk of finding a misfit should all be factored in the cost. The extravagant counter-offer makes a lot of sense until the employer has cushioned itself for your exit. Many employers know, by statistics, 9 out of 10 employees who accept a counter-offer would leave within 12 months.[2]

So, once you have accepted a counter-offer, you will be either be swimming against the current to prove your worth, or you will have to race with your employer to initiate the next departure, or both. Many articles have enlisted the reasons why candidates who accept counter-offers would not stay for long. This article is only going to name two major ones. First, while most of the counter-offers is encapsulated in a pay rise, seldom does the solution reflect the cause of your move. What triggered you to leave is often remain unresolved. Second, the moment you handed in your notice will be remembered as a sign of disloyalty no matter how heavily it is sugar-coated. Organisations are made of human beings who feels. The trust, once lost, could take years to rebuild.     

With the pay rise and potentially a promotion that comes with the counter-offer, however, will you be in a better position when you are hunting for jobs again? Experience tells us that it could be doubtful. Candidates who rejected an offer would have a lesser chance of getting it when applying to the same company again. Recruiters might also not be as eager when referring these candidates to their clients as they have their own reputation to protect.

It is, however, not the end of the world if you have taken a counter-offer. Come speak to us and we would be delighted to support you on your next move!

[1] https://www.recruitment-software.co.uk/7-counter-offer-statistics-every-recruiter-needs-know/

[2] Ibid.