It’s common now that when you leave a job, your employer will give you a counter offer. At a time when more people are leaving their jobs in a competitive market, businesses are trying harder to retain top talent.
Data suggests that as of 2022, around 40% of workers are expecting to leave their job over the next 6 – 12 months because they’re trying to achieve a better work-life balance. But what is a counter offer? And should you accept a counter offer if you’re leaving a job?
What is a counter offer?
In recruitment, a counter offer is a set of benefits that an employer provides an employee if they’re resigning. These packages are designed to stop a top employee from leaving the role and are usually a direct response to a challenge that a worker is experiencing. You’ll usually receive a counter offer after you hand in your notice and it’ll outline a set of benefits you’ll get if you stay in the role.
So why are counter offers now more common?
Fundamentally, it’s cheaper for the employer to offer more benefits than replace the worker as a whole. Some other reasons that you might receive a counter offer is because:
• The business wants to make sure they keep an employee’s knowledge of how the business works
• The business doesn’t want to create extra work for a team during a busy period
• The business has a good company culture and wants to avoid a dip in morale
• The business doesn’t believe they can replace a worker due to external market factors
Why are more businesses offering counter offers?
Counter offers have become much more commonplace since the global pandemic. The challenges COVID presented meant that many employees were reluctant to lose job security, which directly contributed to a competitive, candidate-led market.
This has presented challenges with recruitment and now means that when a top employee does leave, employers are struggling to replace them. For the professional services sector, this is especially true due to the need for technical, specialised skills.
Because the professional services industry generally requires candidates to have more advanced experience or qualifications, it’s naturally a tougher market to recruit in anyway, before we consider the change to a candidate-led situation.
It’s this shift that means counter offers are becoming more popular, adopted by firms that want to retain staff of all experience and skill levels. New research suggests that around 50% of all candidates that resign from a role will receive a counter offer. With that in mind, should you take it?
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Should you take a counter offer?
When you receive a counter offer, it’s always important to consider whether it’s the right choice for you. While you might have some loyalty to the business, it doesn’t necessarily mean you should take it straight away.
The final answer generally depends on your individual circumstances but fundamentally, there are some questions that you should ask yourself when you receive a counter offer:
Will a counter offer really help long-term?
Although a counter offer can solve short-term issues, historical data suggests that it rarely helps over the long-term. Nearly 80% of workers that take a counter offer with their current employer generally leave in six months anyway. That number increases to 90% over 12 months.
This is because a counter offer may paper over the cracks but not completely solve the various factors that might be in play. This is especially true in how handing in your notice and then accepting a counter offer may change your relationships in the business.
While your bosses obviously want you to stay, it may be a way of temporarily keeping you happy while they prepare for the inevitable departure.
We always suggest thinking about the long-term over the short-term here at Alexander Daniels and accepting a counter offer is no different.
Why are you getting these benefits now?
If you’ve gotten to a point where you’re receiving a counter offer, you’ve probably experienced some level of success. If this is the case, why have you not received any of these benefits in the first place?
In an ideal world, benefits such as salary increases, bonuses or extra benefits should be based on your immediate performance, rather than you taking drastic actions such as looking for a new job. While this isn’t always the case, you may want to work for a company that does take this approach.
The thing to think about is, will these benefits fix the issues you had in the run-up to the resignation? More often than not, the answer is no.
Also remember, if you receive a promotion or a new title as part of a counter offer, you’ll suddenly be in a position where you need to justify your new responsibilities, despite the fact you were ready to leave in the first place.
Why were you leaving in the first place?
A few of the most common reasons for leaving a job include career progression, development and salary. There won’t necessarily be just one factor. You can (and probably will) experience a variety of these issues at once, which are difficult to solve with just one counter offer.
Consider salary. While it’s nice to receive a higher salary as part of your counter offer, it’s unlikely you’ll immediately receive the career progression or development you’re looking for. These issues will still be present in the short-term and may not ultimately lead to a positive working experience.
Would you have regrets about ‘what if?’
At its core, the decision to accept or decline a counter offer depends on how you’d feel after the fact. If you feel like you’d have regrets for not taking on a role or experiencing a new challenge, this can quickly turn into resentment.
If you do start to have regrets after accepting a counter offer, this can quickly put a spotlight on other issues and all you’ll have to show for it is a lost opportunity.
How to handle a counter offer when you leave a job
Depending on how you feel about declining or accepting a counter offer, here’s some tips on how to handle a counter offer:
Clarify with your manager: If possible, talk to your line manager and find out the exact terms of the counter offer. Are you truly valued or do they just want to avoid the recruitment effort of replacing you? Make sure exactly what you’re receiving and what that looks like.
Speak to your recruitment professional: After you’ve spoken to your manager, speak with your recruitment consultant (if you’re working with one). Your recruitment agent will have seen hundreds of counter offers and can provide an opinion with more professional experience. Remember that it’s in your consultant’s best interest to make the right call for you, as they want to maintain a positive relationship with you and the client.
Re-evaluate your reasons for leaving: When you’re debating whether to leave or stay, reconsider the issues you had and exactly what your problem is. While you may be initially thinking about salary or benefits, also consider the responsibilities you have; the culture of the business and what the future might hold for you.
Compare the counter offer to the new position: While you’re considering the counter offer, take the time to see how that measures up against the new job. What is the company culture like at both businesses? Which company is going to offer more possible development? Which company best aligns with you? Think about what works in the long-term.