The employee may not even resign, but simply inform their employer that they have an employment offer that they are considering, with the intention of eliciting a counteroffer from their current employer.
What is a counteroffer?
When someone finds a new job and hands in their resignation at their current job, the current employer will often give them a counteroffer to match or better what the new employer is offering. The employee may not even resign, but simply inform their employer that they have an employment offer that they are considering, with the intention of eliciting a counteroffer from their current employer.
Why do employers give counteroffers?
Recruiting and training new staff is expensive. Companies are often prepared to give an employee a higher remuneration or better package in order to save themselves the hassle of recruiting and training a replacement.
Occasionally, when an employee has received an attractive job offer, the current employer will realise that they have undervalued the employee and will adjust their salary to be more market related relative to their role and experience.
Should you accept a counteroffer?
Accepting a counteroffer is generally not a good idea, but not always. There are many factors to consider, here are our top 5:
1. Why are you leaving?
If you are leaving just because you believe you deserve to be paid more, and you’re happy with everything else like your work and the company culture, then a counteroffer may be a good option. However, if you are not happy in your current role for a number of reasons and pay is just one of them, then a pay increase will not make you happy.
2. Is the new role a promotion or will it give you additional experience?
If the new role is exactly the same as your current role and you’re happy where you are, you could accept a counteroffer. But new jobs often present new opportunities to learn, grow and gain experience. They may offer a promotion to a higher role, or clearer career path. These things can be much more valuable than a bit more money.
3. Has the relationship been damaged?
It’s very difficult for an employer not to question your loyalty when you inform them that you have been applying for other jobs. You may accept their counteroffer and earn more money, but you will find that things will not be the same at work now that the trust has been broken.
4. Reduced opportunities
This is related to point 3, if management at your current job don’t trust you because they think you might leave at any point, in the future they are less likely to promote you, train you or invest in you in any way.
5. Comfort zone
People generally don’t like change, so it can be tempting to stay at the job we know rather than face the challenge of a new job. However, if you are serious about your career and reaching your long term goals, playing it safe is not going to get you anywhere.
Whether or not you accept a counteroffer will depend on the circumstances and what you are trying to achieve. If you will be happy with a simple bump in remuneration, accepting a counteroffer may work for you. But if you are trying to develop your career and create opportunities for advancement in order to reach your long term goals, accepting a counteroffer could be a mistake.