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Consequences of a Counter Offer

In the current competitive economy, it is common practice for employers to do everything in their power to keep an employee from resigning. Counter offers often include newly created incentives that were previously not offered to the employee such as bonuses, promotions, and flexible schedules. Typically these are offered to entice the candidate with short term benefits that mask the underlying issues that the company has failed to address previously. Statistics show, and my personal experience has shown, that while there are reasons a counter offer makes sense for the employer, there are consequences that employees should strongly consider before accepting a counter offer. Here are three of them:

Relationships Change
If there is one truth to the workplace, it is that there are few secrets. Chances are by the time an employee resigns and gets a counter offer, several people have been told. This can effect the dynamic of everyone in the office is sudden perks or incentives are offered to one employee, but not to others. Just the process of resignation and counter offer impacts relationships. The employee had mentally committed themselves to moving on to their next opportunity and is now confused and emotionally torn having to rethink the decision at a time when their emotions can impact what should be a logical decision. . Additionally, the supervisors or colleagues may have a feeling that the company is “chasing” an employee who really had decided to leave in almost every case supervisors and employees tend to be less trustful of and willing to work closely with an employee who has already “resigned once.” Managers and supervisors also report that the process of an employee resigning and then “staying for more money” makes them feel manipulated and not in control of the employment process. The end result is an employee who accepts a counter offer may never be viewed or treated exactly the same way again.

Issues Remain
In the heat of the moment, offering the employee more money to avoid their departure may make sense. For the employee, getting more salary and possible perks and benefits without having to go through the trouble of changing jobs can sound good as well. However, research and experience tells us that money is rarely the sole reason an employee looks to make a change. Once someone has identified things about their current role that made them unhappy enough to seek a new position, those issues are hard to forget. A recent study by Accenture reports that the top reasons an employee looks for another job are:

Very few counter offers can resolve or address these areas of discontent.

Likely to Still Leave
Perhaps the most compelling reason for an employee to not accept a counter offer is that they will likely leave the company in the near future anyway. Studies from the Wall Street Journal show the following statistics regarding those who accept counteroffers:

For many employees a counter offer is a short term solution. Sooner or later the same factors that lead them to look for another position will cause them to leave. When this happens the employee can only hope that a position as good as the one they turned-down last time is still available.

As a recruiter I see many companies attempt to use counter offers to avoid workplace disruption. Not to mention that it looks bad and causes a lot of headaches for a manager when an employee leaves. For an employee whose reasons for looking went beyond just compensation, counter offers rarely lead to a happy long-term career.