Candidates

Counteroffers 101

The Truth About Counteroffers

“Although you think you’re staying, you’re really still leaving, but now it will be on their terms, not yours.”

A counteroffer is merely any type of inducement your current employer uses to dissuade you from leaving, once you have submitted your resignation.  They invariably involve some type of a promise from your boss.  In most situations, a counteroffer will involve higher levels of compensation for you if you stay, and your boss will usually refer to the promotion the company was planning for you, or how he or she was about to change your job description to make it more satisfying for you.  Most people fail to ask themselves the obvious question, “If the company holds me in such high regard, why did I have to resign to get what I deserve?”  This, of course, begs the follow-up question, “Will I have to threaten to quit in the future to get what I deserve?”  The sad truth is there is an extremely high probability that you won’t even be there in the future.

Believe it or not, when you announce your resignation, your employer’s first thought is not about what this means to you, but rather how this will impact him or her.  Here are a few examples of your boss’s immediate thoughts:

  • This couldn’t come at a worse time. I am spread too thin as it is, my department is already behind schedule, and this going to hurt morale.
  • My review is just around the corner, and this loss is going to take a toll on my performance.
  • It is not going to be easy to replace this person on such short notice, and my department’s year-to-date performance was setting me up for a nice bonus.
  • If I can keep this person in place just until I find a suitable replacement, that would make my life a lot easier and might just salvage my vacation plans.

On the other hand, what your boss will actually say to you will be a far cry from what he or she is really feeling. Some possible examples are:

  • I’m really shocked to hear you were this unhappy.  Let’s put our heads together to see what we can come up with so you will want to stay.
  • This really hurts, especially since I had just worked out the details of your upcoming promotion, but upper management asked me to keep it confidential until next month.
  • I was going to give you a raise next quarter.  How about we make it retroactive to the beginning of this quarter?  I think you’ll be pleasantly surprised by the size of the increase I have arranged for you.
  • I don’t want to see you make a mistake here.  I have heard some disturbing information about your prospective employer.
  • After all I have done for you, this is how you repay me?

Unfortunately, most bosses know a subordinate’s emotional framework as well, if not better, than the person does.  They can be very adept at pushing any or all of your emotional buttons – guilt, greed, fear, the need for recognition, and the need for companionship. When it comes to the resignation process, if you don’t maintain a “business decision mindset” (similar to the mentality of a boss who decides to downsize his work force), then you run the risk falling prey to the superficial lure of the counteroffer.

Before you yield to the lure of a generous counteroffer, consider these undeniable truths:

1. Regardless of what a company says when it is extending a counteroffer, you will, from that moment forward, be considered a fidelity risk.  You will lose your status as a team player and your place in the inner circle.  This will come into play in future decisions regarding promotions and career-enhancing opportunities.
2. Statistically, over 85% of executives who accept counteroffers are gone from that employer within 18 months of accepting the counteroffer.
3. Counteroffers are usually nothing more than a means of stalling your departure to give your employer time to figure out how to replace you.
4. When the word gets out that you resigned and then accepted a counteroffer to stay, your relationship with your peer group in the workplace will become strained as some measure of resentment will begin to surface.

The reasons that prompted you to entertain outside opportunities in the first place will still be there.  Your boss’s concessions will make the situation a little more tolerable in the short run, but the underlying sources of your original dissatisfaction will eventually surface again.

If, after you have learned the truths about counteroffers, and you still succumb to your boss’s persuasive tactics, then there is one final reality you would do well to embrace.  Although you think you’re staying, you’re really still leaving, but now it will be on their terms, not yours.

 

Ten reasons for not accepting a counteroffer

 

(Provided by the trainer Bob Marshall):

1. What type of company do you work for if you have to threaten to resign before they give you what you are worth?
2. From where is the money for the counteroffer coming? Is it your next raise, early? (All companies have strict wage and salary guidelines which must be followed).
3. Your company will immediately start looking for a new person at a lower salary.
4. You have now made your employer aware that you are unhappy.  From this day on, your loyalty will always be in question.
5. When promotion time comes around, your employer will remember who was loyal, and who wasn’t.
6. When times get tough, your employer will begin the cutback with you.
7. The same circumstances that now cause you to consider a change will repeat themselves in the future, even if you accept a counteroffer.
8. Statistics show that if you accept a counteroffer, the probability of voluntarily leaving in six months or being let go within one year is extremely high.
9. Accepting a counteroffer is an insult to your intelligence and a blow to your personal pride, knowing that you were bought.
10. Once the word gets out, the relationship that you now enjoy with your co-workers will never be the same.  You will lose the personal satisfaction of peer group acceptance.