Written by Abbie Smith, Associate Director
Woohoo! After months of preparation, questions and nerves you’ve finally been offered the job you had your heart set on. You happily hand over your resignation letter and start dreaming about your new role. But wait, your boss presents you with a counter offer…what should you do?
As an experienced finance recruiter, I have seen this scenario many times and it is my job to highlight this from the outset – it sets the scene for the candidate and also allows more control when it does happen. Ultimately, the decision is down to the individual to define what they need from a role but there are few snippets of advice I can offer to help them figure it out.
A counter-offer is an increased salary and/or a promotion offered to an employee upon them handing in their resignation. It’s a bid to get them to stay at the company and withdraw their resignation.
It can be an emotive time for individuals as they have to make a decision on whether they wish to stay with their current employer for an increased salary or whether to stick to their guns and make the move to a new employer. It can raise many different questions in the mind of the individual, but the main question is whether to prioritise financial gain over your own principals.
Despite the emotions that a counter offer can conjure up for the employee, they are usually a money saving exercise for the business.
There will be a cost associated to advertise your job and fill the role should you leave. Additionally, the impications of training a new employee can be time-consuming and costly. There can also be many challenges in finding your replacement such as skills shortages or lack of available candidates. Altogether, your resignation could cost the company thousands of pounds and that’s the biggest reason why they will offer you a pay rise.
It’s important to remember why you wanted to look for a new role - were you under-valued, was there no progression in the role or did you dislike the industry? It’s easy to be blindsided by the new offer that’s now on the table and the ease of staying exactly where you are, but is that what you really want? In my experience over 60% of my candidates who accept a counter offer return to me looking for a new job in less than a year. So, take some time to really think about it and decide what’s right for you - what made you want to leave in the first place?
Unless your reason for moving is solely financial then accepting a counter offer is rarely the right choice. After all, if the money for your pay rise was available before then why did it take your resignation for them to offer it to you? Accepting a counter offer usually only impacts one thing, and that’s your payslip. If you were feeling under-valued before then unfortunately that won’t change if you decide to stay.
The other thing to consider if you accept a counter offer is the behaviour of colleagues and managers toward you in the aftermath. Once it’s common knowledge that you were willing to resign it can cause trust issues and you may be seen as disloyal. You need to be confident that you can navigate these emotions and remain confident in yourself and your role.
Before accepting a counter offer you need to take some time to think about all the elements involved with the decision. I always suggest that my candidates write a pro's and con's list as it can help to get everything down on paper and really reflect on the offer.
If you are certain that accepting the counter offer and staying in your current employment is the right choice for you then the first thing you need to do is let you recruitment consultant know. They will know what to do and will share this information with your proespective employer. If you are not using a recruitment consultant then you will need to break the news to the hiring manager yourself. Be sure to keep it professional, polite and honest, you don't want to create a lasting negative image of yourself with this employer.
There are many reasons that someone would reject a counter offer. In my experience the main reason is that the individual recognises that despite an increase in pay they would still be unsatisfied in their role with their current employer.
Most people decide to leave a job for reasons other than money, such as a better work-life balance, more career progression opportunities or an improved working culture. When you receive a counter offer it's important to remember your original reasons for applying in the first place. If you decide that you value those reasons higher than the financial incentive being offered you should reject the counter offer.
Once you have made your decision to reject the counter offer the first thing you need to do is let your current employer know. How you communicate this depends on how the counter offer was discussed. It is usually better if you can decline the offer in person as it shows confidence but if you received the offer via email then its acceptable to respond via email. Be grateful when declining the offer, but be sure to state your reasons why you reached your decision.
Thank you for you recent offer, but I am writing to let you know that I will be declining it. I am extremely grateful for my time at [Company Name] over the past 5 years and have enjoyed working alongside the fantastic team. However, I am looking to further my career and understand that there are limited opportunities for me at [Company Name].
Please accept this email as my official resignation from my role as [Job Title] at [Company Name], effective [Date of leaving].
Next you need to update your prospective employer - you can do this via your recruitment consultant if you're using one or alternatively you can do it yourself. Again, it is beneficial to explain your reasons for accepting the job offer and display your willingness to start. This will help to build a positive relationship with your new employer and create a good foundation before you start.
At Four Recruitment, I’ve seen a significant increase over the last couple of years in companies attempting to buy their employees loyalty. This is due to the nationwide shortage of candidates affecting the job market currently. Businesses understand the potential struggle they might face to find a replacement, so offering more money is a sure-fire way to avoid this situation.
As the prospective employer in this situation there is very little you can do and the power is in the hands of the candidate. However, after years of experience I have learnt what you can do to avoid counter offer situations and the best methods to handle them and ensure you remain a viable option in the eyes of the candidate.
It’s important to understand the reasons for the candidate leaving – so ask them outright. If they have a big focus on money or are actually quite complimentary about the company, it’s likely they will be easily swayed back to their current employer. Understanding their motivators early on will allow you to avoid a bidding war and focus your efforts on other candidates.
Once you understand what motivates your candidate you are in a better position to showcase your company. If they’ve got kids and want the ability to drop them at school then let them know about your flexible working options. If they’re looking for progression then tell them more about the development plans. You get the idea!
You’ve just got off the phone to the candidate and they were delighted to accept the offer. However, there are still lots of other challenges for the candidate to face – mainly handing in their resignation. Make sure you stay in touch with them regularly and even invite them back before their start date to meet the team and see the office. Keeping in touch with them will allow you to build an effective rapport and maintain their excitement about the role, it will allow them to feel invested in your business, your opportunity and your employees.
Recruiters have seen it all – they know the warning signs and how to handle a counter offer, starting from the moment they speak to a candidate for the first time. Using a recruiter will save you time and money as they can spot the candidates on the lookout for a bargaining opportunity and will do their homework before putting any in front of you.
There’s no denying that the counter offer situation is a tricky one and your decision should not be taken lightly. Take some time to think about the benefits of each company and you can use our salary guide to get a better understanding of average salaries associated with your role.
We have a selection of job description templates available to support businesses on their hiring journey. Why not check out some of our templates, such as our Financial Analyst Job Description?
If you’re on the lookout for a new role you can take at look at our current vacancies. If you need help finding the right company for you then get in touch with our friendly team on 01204 326 444.
If you’re currently hoping to expand your team and keen to avoid the dreaded counter-offer scenario then get in touch with myself or the rest of my team on 01204 326 444. We can help find the best candidates for your business across finance, HR, business support, supply chain and executive.