Dangers of Accepting Counteroffers

As a result of downsizing to drop more profit to the bottom line, mergers and acquisitions and the “lean and mean” corporate mentality of the last decade, most people have come to realize that the “employment contract” has changed. At one time, employers were expected to provide long-term employment and an opportunity for growth and employees were expected to provide loyalty. Things have changed. People today have come to understand that managing their career is their responsibility. They can no longer depend on their company to assure their ongoing employment and security.

Companies react to a resignation in different ways. If the company you are joining is a competitor or if your present company’s culture is paternal, as is the case in many privately held companies, the reaction to your leaving may be hostility followed by dismissal.

In today’s business climate, however, you should expect to get a counter offer. As a matter of fact, you should be disappointed if you don’t get one. It is often difficult to resist a counteroffer. This is especially true if you are making a move to enhance your career, rather than to move away from an undesirable situation. It’s not unusual to feel a little guilty and concerned about leaving your “friends”. If you have been with your company for a period of time it can feel like going through a divorce.

Companies know this and will take advantage of it. It is often cheaper to make a counteroffer than hire and train someone new, especially when it may well cost the company more money to hire an experienced new person than it would to give you an unplanned raise and keep you. After all, you are a known entity.

Counter Offers Can Come in Forms Other Than Money

They can be an appeal to your loyalty.

They can attempt to manipulate you through a sense of guilt, i.e.: “after all we have done for you”, (as if you did not earn your keep).

There may be a promise of a brighter future, i.e.: a promotion, larger territory more responsibility, etc. This information, of course, was something that could not be shared with you while you were a trusted employee. This type of counteroffer usually comes from a more senior manager.

The Questions You Have to Ask Yourself Are:

  • “Who benefits?”
  • “What is their agenda and how will my leaving effect them?”
  • “Why did they wait until I resigned to increase my income or share information with me that was critical to my career in the company?”
  • “Are they simply trying to “take me out of play?”
  • “Are they just buying time until they can replace me?”
  • “Is this my next raise – in advance?”
  • “Whose budget is this “extra” money coming from?”
  • “Will they still respect me in the morning?”

 

The answers to these questions are the reasons most people recognize that counteroffers are a short-term fix. It is also the reason that the majority of people who accept counteroffers find themselves out of the company within 6 to 9 months of having accepted the counter. This is especially the case if money is involved, because once a financial counteroffer is accepted, the company is bound to feel that you forced them to increase your income when they were unprepared to do so. If your raise was not in the budget, then someone is going to feel embarrassed by having had to make that concession. Your loyalty and integrity will be in question from that point on. Even under the best of circumstances, you will find yourself “out of the loop,” which is why most people leave anyway within a few months of accepting a counter.

For your part, you will always wonder why you had to resign to get a raise, a promotion, or to be trusted with highly confidential information. However, if you are intrigued with the prospect of a counteroffer here are the rules:

  • Never, Never, Never discuss the offer you have received from the other company. You will never know what you are truly worth to your present company if you give them a figure. And if you “puff” the figure and your company finds out (and they will), you are history.
  • Get the counteroffer in writing. You will have the offer from the new company in writing so why not the counteroffer? We have seen a number of instances where counteroffer “promises” are conveniently forgotten or put-off. We have even seen counteroffers made by people who were leaving the company and who left no record of the counteroffer.
  • Ask for a “stay-on” bonus. If you are being offered more money, you must have been underpaid. Why not ask to have the difference made up in the form of a bonus.
  • Ask for time to think about it.

 

The reason that counteroffers don’t work is because accepting a counteroffer changes the nature of your relationship with the company. Our advice, therefore, is don’t go forward unless you are committed to going all the way. Once you have decided to accept an offer from another company and resign, you have “put the fat in the fire.” Don’t do it unless you are committed to going forward. Otherwise, you could find yourself without your new job and without your old job as well.

Remember, the people who are counseling you to stay have more than likely made a move or two themselves in order to enhance their careers.