Why You Should Never Accept a Counter OfferSep 22, 2022
Did you know that 90% of people who accept a counter offer will leave that same company within one year of accepting the counter? This is a super interesting stat that I like to reference when coaching my clients that receive counters. It provides good insight into why you should rarely, if ever, accept a counter offer during the negotiation process.
Let’s look at a few more stats to back up this point.
- 80% are gone within just six months
- 50% are already looking for a new job within 60 days
- 57% of people who are offered a counter offer will accept it
- It costs employers about 200%+ to rehire your role if you leave
There are some very rare situations where you can and should accept a counter offer and stay at your current job, but generally you will want to reject the counter offer. Here are some of the key items to consider:
This is often overlooked. First, determine why you would want to leave your current company. Open up a Google Doc or take out a notepad and focus on four key areas:
- Leadership—Many people leave because they have a bad manager. If you don’t like your lead or manager, think about whether you can move to a different internal role under a different lead. If you are stuck in a bad management situation, then you probably have a good reason to be looking for another job.
- The Company—Do you like the company? Do you like your coworkers? Do you like the company mission and culture? If you like the overall company, then you may rethink a move. If you don’t like the company for any reason, then it could be a reason to look elsewhere for a better situation.
- Compensation (Including Benefits and Perks)—If you are unhappy with your compensation, writing down your feelings can help you be better prepared to take the necessary steps to get better compensation. If you like your job and company, then start by strategically asking for a raise to improve your compensation without having to move. Look beyond just financial compensation and think about the benefits and perks like remote working or business travel. Push for what you want where you are before you start interviewing for a new job.
- Personal—Always go back to your goals. Does your current position align with your personal and professional goals? Are you passionate about what you do? Does it fit your personal situation (family, children, location, etc.)? If your current position or company can’t satisfy your personal needs and professional goals, it may be time to move on to a new opportunity at a place that will.
The reason why you are going through this process is that it will make you much less likely to accept a counter offer. When you take the time to fully assess your current situation, it can dramatically affect how you view a new job offer.
Item #2—Resignation Conversation
You’ve made up your mind to resign and you schedule a meeting with your manager. They are caught off-guard. Inevitably, they will ask if they can have a little time to speak with leadership and see what they can do to keep you. Your response should always be:
“No thank you. I’m really grateful for the opportunity to have worked here. It was an amazing experience, but I want to talk about a transition plan.”
Shut down the counter offer 100% of the time when at this stage. Show your respect, but make it clear you’ve made your decision and are ready to move on.
Item #3—Why a Counter is Offered
Now, let’s talk about some of the reasons why you shouldn’t accept this counter offer. First, you will have lost the manager’s trust by declaring your resignation. The counter offer may bring you more money in the short term, but it could also be loaded with more responsibilities/expectations. This will weigh on your manager’s mind more than you realize and may hinder a positive relationship moving forward.
Second, they are doing what is financially responsible for the company. They know it will cost more to replace you than it will be to give you a raise. Throwing an extra $10K or $20K at you is easier than going out to hire someone else. Remember, it’s over 200% of the cost to replace someone. They know this and the counter offer isn’t for you. It’s for them to save face and save money.
In my own experience as a Recruiter, I saw this time and time again. I had a few candidates accept counter offers, but almost all of them were gone within a year. These stats don’t lie. A counter offer is often just a speed bump that slows you down before ultimately walking out the door. You simply aren’t likely to stay there for a long time and the data supports it. As an employee in this situation, it is best to reject the counter offer and move forward with that new position that better meets your needs. Don’t be tempted by a counter if your heart truly isn’t in it.
Check out my full video on this topic below: