How to Avoid the Counter-Offer Trap

Counter-offers may be flattering, but what do they truly represent? A sincere renewed commitment to a resigning employee? Not exactly--they are no more than an employer’s attempt to minimize loss. Loss is significant when even the average employee resigns, so it is important that employees see through the manipulation and make an educated decision based on their own interests and professional development.

Labeling a counter-offer as a means of manipulation is arguably a strong accusation, but after years of seeing candidates reject great opportunities, only to succumb to false flattery, no other description seems adequate. The majority of employees are keen to receive the attention of their employer, despite there being times when their work and personal needs have gone unrecognized during their tenure. This makes a counter-offer an even more attractive option as it appears to be the acknowledgment that had previously been so conspicuously absent. The problem, of course, is that it is not the real recognition they seek and is not on a par with accolades and promised that are offered without the pressure of a resignation letter on the table.

Seeking new opportunities should never be used as a means of increasing salary. Despite any apparent improvement in working conditions and salary, the real battle is lost as ultimately, the employer’s hand has been forced and thus loyalties have been compromised. Employees desiring better professional prospects or higher pay should fight on the merits of their contributions to the business without resorting to threats of departure. If this is not possible and career development opportunities are not enough to offset an employee’s wants, needs and career objectives, then they need to work towards finding new employment with a determination not to look back. Making this decision closes the door to counter-offers and ensures that new opportunities are sought for the right reasons and without secondary motivations.

Regardless of their intentions, some find it too difficult, both emotionally and practically, to turn down the rewards a counter-offer may bring. For many this may be increased salary, better benefits, improved working conditions, or even stock holdings in the company. It is only by seeing these perks as a mitigator of loss and not as a recognition of achievement or gesture of understanding that they can be viewed in the correct light.

Expect a counter-offer: any good candidate is sure to attract the attention of their employer and therefore be offered more favorable employment than their current circumstance. By learning to expect this beforehand, surprises can be avoided later and candidates are able to recognize that these benefits would have been offered upfront if the employer truly wanted to recognize their contributions and them as a person.

Why can employers offer so much when faced with a resignation? The main reason is that the cost of hiring a new employee is so prohibitively high. To determine the cost, one needs to add: the loss of opportunity and output of the former employee; those of the staff needed to interview new candidates; and the price of a recruitment agency or advertising platform to solicit new applications. This equation often generates a cost in excess of $20,000, and this is only for lower level positions and under conditions when the position is filled quickly. In situations where the employee is senior or has a large influence on the organization, costs mount quickly with added factors such as the impact on morale, training costs and temporary coverage costs. If you were the manager, a couple of grand pay rise seems cheap – doesn’t it?

With such loaded motivation, employees should never consider a counter-offer as a sign of recognition. They should also consider carefully what life will be like for them in the company after their attempted resignation. Will they still be considered loyal? Will their manager feel forced to make concessions and be bitter as a result? How will this effect career development prospects? Has anything really changed?

Accepting a counter-offer does not only have an effect on professional development opportunities within the company, but may also cause ill feelings on the part of the company originating the offer, as well as with the recruiter. Recruiters lose face when candidates pull out of accepted engagements at the last minute. This can affect an employee’s reputation in the marketplace and future access to new opportunities.

By seeing a counter-offer as a tool of manipulation, employees see through the machinations of an employer that is desperate to keep their costs in line. Praise, development, accommodation, rewards and bonuses are given during an employee’s tenure with an organization and not because of resignation. Employees who interpret a counter-offer as praise are missing important career development opportunities, negatively affecting their future with their present employer and potentially compromising their job opportunities in the future.

To avoid this dilemma, be clear about your reasons for seeking alternative employment in the first place. Expect a counter-offer and be determined to turn it down, regardless of the salary. Be proud of yourself for making employment decisions in a calm and logical manner, looking out for your own personal development opportunities and career growth. No one else will, nor will they start to simply because of your decision to leave.