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. Previously, employers were expected to provide long-term employment and an opportunity for growth, and employees were expected to provide loyalty. Currently, people are responsible for managing their own careers. Marketing and sales talent, like other professionals, 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, and your present company heavily relies on your sales talent and work, as in the case of many privately held companies, the reaction to you leaving may be hostility followed by dismissal.

In today’s business climate, however, you should expect to get a counteroffer. You should be disappointed if you do not 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 is not unusual to feel guilty and concerned about leaving your “friends.”

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 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.

Counteroffers 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, such as “after all we have done for you.”

There may be a promise of a brighter future.  Examples seem to be a recognition of your sales talent and may include a promotion, larger territory, and more responsibility. 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.

You Should Ask Yourself the Following Questions:

  • Who benefits?
  • What is their agenda and how will my leaving impact 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 keep me from competing against them?"
  • 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 tomorrow?

Most people recognize that counteroffers
are a short-term fix.

The answers to these questions are the reasons most people recognize that counteroffers are a short-term fix. It also is the reason that the majority of people who accept counteroffers find themselves out of the company within six to nine months of having accepted the counter. This is especially the case if money is involved, because once a financial counteroffer is accepted, the company will 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. Once you accept a counteroffer, while your marketing or sales talent may not be questioned, your loyalty and integrity will always be in question. Even under the best of circumstances, you may find yourself excluded from many internal communications, which is why most people leave within a few months of accepting a counteroffer. You always will 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 is what you should consider:
  • Never discuss the offer you have received from the other company. You will not know what you are truly worth to your present company, if you tell them what the other company offered you. If you inflate the figure, your company will find out (and they will), and you will be out of a job.
  • Get the counteroffer in writing. You will have the offer from the new company in writing, so why not get the counteroffer in writing, too? We have seen a number of instances where counteroffer “promises” are conveniently forgotten, or delayed indefinitely. Sometimes, managers who are leaving the company make counteroffers, but leave no no written record of what was promised.
  • 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 that accepting a counteroffer changes the nature of your relationship with the company. Our advice for marketing and sales talent is do not 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 made your decision. You could find yourself without your new job and without your old job. 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.

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