Should you really accept a counteroffer?
by Niamh Boorman
Picture this scenario:
You’ve had an interview, and are excited to get a call from the hiring manager offering you an increase on your current salary and some great benefits to match.
But, back in the office where you’ve worked for the past five years, you tell them you’re moving on.
That’s when your boss turns around and hits you with a counteroffer. What should you do?
Before you make your final decision on which offer to accept, here’s what you should consider.
Staying means you’re hanging a ‘Discontented’ sign around your neck
Unfortunately, accepting a counteroffer can make you a marked man or woman. You have signaled that your loyalty to your current organisation is questionable. In fact, Harvard Business Review research concludes that 80% of senior executives have diminished trust in the employee in such a situation.
It’s also possible that you may damage your reputation with the new company who’s offer you have declined, not to mention the insurance industry.
Accepting a counteroffer might not be financially worthwhile
More often than not, the counteroffer your current employer proposes is just the next pay rise you were in line for anyway. While it’s nice your salary has been boosted a little sooner than you may have expected, it’s likely your next pay rise is now much further away - this may be the last salary increase you see for a while.
Plus, ask yourself this:
If you truly are worth the value of the counteroffer pay rise, why didn’t your current company offer it to you before you resigned?
There could be a number of reasons – perhaps your company has a strict salary and promotion structure and timeline or maybe your manager simply didn’t stop to think that it was time you were compensated for your great work.
Either way, these reasons are likely to still stand when it comes time for your next pay increase.
Your decision to look for a new job was probably about more than money
It’s likely you decided to look for a new role for a variety of reasons, not just a pay increase. For example, you may have felt your current role or company was lacking in one or more of the following areas:
- Internal career progression pathways
- Training and development opportunities
- Flexible work hours, days, locations or working from home
- Alignment of leadership/management style or relationships
- Team and company culture
- Type/variety of work or clients
So, when the counteroffer was made, did your current company consider your wants and needs in the above areas, or simply increase your pay?
Being paid more won’t fix a broken relationship with a manager or co-worker, improve a depressing workspace, replace a bad employer or give you a much-needed change of scenery, for example.
And while the raise may take the edge off these problems for a while, they will return with a vengeance when the shine of your new financial situation wears off. In fact, research published in Harvard Business Review reveals that 50% of employees who accept a counteroffer will finally quit their job within 12 months.
This may be your last chance to leave on good terms
Assuming that you become one of the 50% who leave anyway within a year of accepting a counteroffer, your final departure could end up being very messy. You will risk appearing ungrateful and possibly create resentment among your colleagues, who see what they may perceive as special treatment which turned out to be undeserved.
With the benefit of hindsight, a clean break the first time around might have been the better option.
So, what should a good counteroffer look like?
A counteroffer should address the motivations of why you are considering other job opportunities. So when you receive a counteroffer ask yourself:
- Does the counteroffer take into account the salary, perks and benefits the other offer was going to give you? For example, if the new job comes with an elevated job title and flexible working arrangements, can your old company match that?
- Does the counteroffer provide solutions around the areas of contention that made you want to leave in the first place? For example, if one of the reasons for your consideration to move was your bosses working style or the type of clients you were working with, can your old company promise a new manager or a change in type of clients you’re working with?
- Is it really going to boost your career as much as a fresh start in a new company, with new challenges and responsibilities?
- If the counteroffer only features a pay rise, does doing the same job with more money excite you?
If the answer is no in any of these situations, it may not be in your best interest to accept the counteroffer. Every situation is different, so it’s important to be confident that you have made the right decision. If you’re considering your insurance career, please get in touch with the team at Ensure Recruitment.