As a professional recruitment company, we often come across counter offers in the hiring process. Over the past year, we have seen an increase in these occurring. There have been candidates who have made it through multiple stages of an interview process and received an offer only to turn it down following a counter offer from their current company.
Counter offers can have significant implications for both employers and candidates. This blog will review the implications for both parties.
For Employers
Counter offers are a double-edged sword for employers. On one hand, they can be an effective tool to retain valuable employees and avoid the costs and disruption associated with losing talent. However, they can also be a sign of deeper issues within the organisation.
Reasons employers make counter offers:
- To retain the employee's knowledge, skills, and experience
- To minimise the costs and time required to hire and train a replacement
- To maintain team morale and avoid disrupting existing relationships
However, counter offers can also indicate that the employer may not have been adequately recognising or rewarding the employee's contributions prior to their resignation.
For Candidates
From the candidate's perspective, a counter offer can be flattering and tempting. It suggests that the employer values their contributions and is willing to make an effort to retain them. However, accepting a counter offer may not always be the best long-term decision.
Reasons candidates may accept a counter offer:
- Increased compensation or benefits
- Promises of future opportunities or promotions
- Emotional appeals to loyalty or the desire to avoid change
However, the underlying reasons that prompted the candidate to consider leaving in the first place are unlikely to be resolved by a counter offer. The main motivations for candidates resigning from their current job include salary, career progression, work-life balance, dissatisfaction in their role/company and lack of fulfilment. Candidates can be enticed with a bump in salary, or career progression, however this may only provide a quick fix. 80% of people who accept a counter offer usually end up leaving within 12 months.
Reasons candidates may decline a counter offer:
- The counter offer does not address the underlying issues that led to the job search
- The relationship with the employer has been irreparably damaged by the resignation
- The candidate has already made a commitment to the new employer and does not want to back out
In conclusion, counter offers are a common occurrence in the hiring process, but they should be approached with caution by both employers and candidates. Employers should strive to create an environment where employees feel valued and rewarded, reducing the likelihood of resignations in the first place. In our experience, most candidates that are seeking a new role are doing so because they have outgrown their current role or are no longer challenged by their role. If the candidate is an ambitious person, it is important to recognise that an increase in salary or change in title in a counter offer is unlikely to solve the deeper issue. Candidates should carefully consider their motivations for seeking a new job and whether a counter offer will truly address their needs before making a decision.