Over recent months organisations have reported a significant increase in candidates turning roles down at the last minute because their current employer has counteroffered - often matching or increasing their offered salary.
While this used to happen very infrequently, at Grafton we estimate that around 1 in 18 of our current candidates are receiving counteroffers from their existing employers.
A counteroffer can be flattering and very tempting to accept. The process of changing jobs is often intense and emotionally draining so the opportunity to bring that to an end, avoid a move into the unknown and guarantee an immediate financial windfall can turn heads.
However, in reality, there is a lot for candidates to consider before accepting a counteroffer.
Salary is rarely the sole cause of job dissatisfaction and by purely focusing on correcting this issue, candidates are potentially overlooking a host of other problems which may be bubbling under the surface while in their current role.
In fact, 80% of candidates who accept a counteroffer from their current employer leave the company within six months, and nine out of ten leave within twelve months.
So candidates must carefully think through the pros and cons of accepting a counteroffer and consider the following:
• Your original motivator for leaving the organisation. If it was money then accepting a counteroffer will of course address that. However, does this mean that your employer had been undervaluing you – requiring drastic action on your part for them to address it? If money is not the motivator, will accepting a counter offer actually resolve any issues, or simply paper over them for a short period of time? For many the lure of a larger salary will not change the fact that the role is the same, the people are still the people and the environment is still the environment. It’s really important that you are clear on what it is you want from a future employer and if your needs aren’t being satisfied by your current employer now, what guarantee do you have that they will they be in the future?
• The time already invested to find a new role. It’s not easy to find a new role with a company that perfectly aligns with your values and aspirations. You will likely spend plenty of hours researching, applying, interviewing and negotiating to get to a point where there is a job offer on the table. Does an increase in salary from your current employer really cover the efforts you have put in to get to this point?
• Your employer’s real reasons for counteroffering. Is it because they genuinely value you, in which case it is unlikely that you would have put yourself on the market in the first place, or is it because they want to avoid the ‘headache’ of having to replace you and onboard your replacement in a timely manner?
• The state of the ‘psychological contract’ between you and your employer. The term 'psychological contract' refers to individuals’ expectations, beliefs, ambitions and obligations, as perceived by the employer and the worker . When you decide to leave an employer, it is normally due to a breakdown in the psychological contract, and this can be hard to re-establish once it has gone.
• Reputation; both with external recruiters and your organisation. If you are working with an external recruiter, the chances are that accepting a counteroffer will place a question mark around your commitment to future processes and possibly result in fewer opportunities with that recruiter. Internally, accepting a counteroffer could also damage your reputation as managers and organisations are left feeling they have been held over a barrel.
• The possibility of long-term salary increases. Counteroffers provide an immediate fix to the salary issue, however candidates accepting a counteroffer need to be mindful that future salary reviews are unlikely to be as generous and you could quickly find yourself back in the same situation.
• The value of the overall package from the prospective employer. A counterfoffer may trump the salary being proposed by your potential new employer but it’s important to think about the rest of the package that’s on offer. Can your current employer match the benefits, support, rewards and long-term growth opportunities that you can access by moving to a new company?
How Grafton Can Help
Businesses are increasingly using the counteroffer as a crude employee retention tool which allows them to hold on to employees who have already made the decision to leave. The option to stay at your existing company without having to go through the rigmarole of finding a new job, while earning the salary you want is an enticing prospect.
This can be short-sighted though as it overlooks more important issues which will have a greater impact on your job satisfaction – career development opportunities, improved company culture or the chance to undertake new and different challenges for example.
If you are tempted by a counteroffer you have received, our advice at Grafton would be to make sure you address the issues that led you to look externally in the first place and ask yourself whether your current employer would be willing to resolve these in order to help you achieve your long-term career ambitions.
If not, it could be that your original decision to leave was the right one – and while it may be viewed by some as the trickier path – involving some time and energy to commit to finding the right role, in the long-term the rewards will more than make up for these efforts.