Counter offers have become increasingly common in hiring practices over the last several quarters as employers fight to retain precious talent in a candidate short market.
Companies on the hunt for their next employee have to offer sizable premiums in order to avoid both the threat of counter offers and an unusual level of reticence in the market.
This reticence is in sharp contrast to the wholesale growth of Payments in 2020. Perhaps pandemic based anxiety was a factor, as many other industries suffered, but an increase in job satisfaction may be a better explanation. The rise of hybrid working as a permanent fixture in the working world has enhanced the lives of many professionals, and turnover is reducing.
Whilst companies are putting out some very generous counter offers, matching premiums and even offering additional benefits, there is often more to it than just the money. What should you look for in a good counter-offer, and can you put a price on your initial reasons for wanting to leave?
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A good counter offer should be tailored to address the reason you want to leave. If the only reason is money, then sure, a premium match might be well received, but if the reason is more complex, don’t assume that more money will help you ‘live with it’.
It is quite common for employees to accept a seemingly generous counteroffer, only to be once again ‘on the market’ in a matter of months looking to find something better. The problem is that more money doesn’t address the root cause of the problem.
For example, if you want to leave due to irreconcilable personal differences with a co-worker or management, how much money would you accept to put up with that? Probably not what you are being offered. Even if what you are being offered looks good now, it certainly wont weeks or even months down the line when your mental health is suffering.
Accepting a counter offer can also put you in a difficult position. Your employers determination to ‘buy you back’ shows how badly they need you, which can put a strain on your working relationship. Forcing your employer to show their hand in a sense, leaves them vulnerable, necessitating them to have a counterplan in case you try to leave again, which can mean finding your replacement.
It is often said in recruitment that 80% of those who accept counter offers leave in 6 months. Whilst there is no factual evidence to back this up, it is certainly true that in the immediate period following acceptance of a counter offer, there can be tension.
So if you do accept, you will need to prioritise demonstrating your gratitude and loyalty to the company, you cannot allow an air of fear or suspicion to foster around you, whether or not you plan on staying long term.
The same is true if you decline a counter offer, don’t burn your bridges. Be sure to show how much you appreciate the extra effort your employer has made to try to keep you, there is no sense ruining a perfectly good business contact for the future, you never know who you might end up working with.
In this bidding battle, be grateful to both sides, winner and loser of your expertise, for both have contributed to your professional value, and spent a great deal of their time and money in order to do so.
The worst thing you can try to do is exploit the situation further to your advantage, because you are likely to be dropped by both. If you are working with a recruiter through this process, consider also their time as well, excessive ‘window shopping’ isn’t appreciated, and you risk being dropped as a client if you waste a consultants time.
So what makes a good counter offer?
The most important thing is specificity. How does this offer address your reasons for leaving? Often employers will try to buy you back as a knee-jerk reaction to the thought of recruitment in a candidate-short market. It is easy to be put off-guard by this and agree before you have had a chance to think, so don’t make any immediate decisions.
Take the time to deconstruct the offer and compare it to your reasons for wanting to leave. If all you wanted was a bit more flexibility, and they offer you locally remote terms, then bingo! If what you wanted was just the chance to work with newer technology or processes, and you know for a fact the company won’t change, then it’s a polite refusal.
Loyalty is honorable, but don’t be a martyr, further your career in the manner which benefits you the most. Follow what motivates you and don’t be afraid of the unknown, familiar comfort rapidly becomes familiar dread.
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