Should YOU Accept a Counter Offer?

Zak Brocchini

09-05-2017
Blog articles

In the technology sector in the North East, there is virtually full employment (1.5% per the Dept. of Labor). It’s a good time to be employed in technology! In a climate where everyone is hiring, companies are offering counter offers to try to prevent candidates from seeking greener pastures. With very few exceptions, I would NOT advise someone to accept a counter offer.

The reasons not to engage in a counter offer are well documented (google it!), though I will add my personal observations from two decades in the staffing industry.

1: Employers are making a counter offer not because they feel you are worth more, but because they are panicking.

When a technology person gives notice, the employer typically has two weeks to get a description together, start an interview process, and make a hire. From start to finish, this process is typically 6-12 weeks long. That leaves a 4-10 week window where the seat is vacant and the systems aren’t being supported, or the development team is short staffed. This means the manager needs to hire a costly consultant, distribute the additional work on remaining team members (not great for moral), or hold their breath and hope they can get by short staffed. A counter offer is often the solution. Typically, the counter offer will come with some ego stroking and emotional appeals about how you’re part of the family which is easy to get caught up in… Though ask yourself, if the company really thought you were worth more, why did you have to resign to get a raise/promotion? Is that a company that really values you?

2: The reasons you started looking for a new job won’t change.

Most people I talk to rank money as their third or fourth most important concern. Issues that usually rank highly (in no particular order) include: working with interesting technology, career growth (often meaning learning new technologies, larger more complex technology environments or applications, or the chance to manage), building products or working for a company they believe in/have interest in, instability in their company (whether that’s financial, changing management, potential outsourcing, etc.), recognition, insane deadlines, quality of life, and commute are all big ones. None of these issues will change with a counter offer, and they will resurface once the allure of the extra money fades.

3: If money is your only motivator, the counter offer may seem attractive in the short term.

Think about what it took to get that raise. Is that a company that really values your contributions? What does it say about a company that thinks you are worth more, but doesn’t pay you that rate? What does it say when you have to go out and interview to prove to your manager that you should get a raise and the recognition you feel you deserve? Realize that the company is likely front loading your next bonus or raise in advance. The next time you’re looking for a raise or an interesting new project (or the company wants you to do extra work), your manager will remember and use the counter offer against you. If you were using the offer to try to get a raise from your boss, you run the risk that they say go ahead and leave…

4: Which leads to trust, the most important factor.

Once the trust is broken, it’s impossible to repair. The reality is you ARE in a relationship with your employer, most of us spend more waking hours at work than at home. Once it sinks in with the boss that when you said you had a dentist appointment you were actually out interviewing, how will you be perceived the next time you actually have to see the dentist? How will you be received next time you want to use vacation days, or need to come in late for whatever legitimate reason you have? Whether voiced or not, your boss will always be thinking that you’re out interviewing again. Your boss will start second guessing any time off requests, and any time you’re late. Your boss will think twice about whether to assign that cool new project to you or someone else, whether to send you for training, and of course how much of the next bonus pool to send your way. As the environment deteriorates at work, you’ll be looking again…

5: You’ve burned the bridge with the other company.

The other company has pressing IT needs too. Once they made the offer to you, they let the other candidates know, stopped interviewing, and shut down the search. When you accept a counter offer you are burning that bridge. The other company now has to start their search over, usually from scratch as the runner up candidate is likely off the market already. Down the line when you are looking to interview again, you may run across those same managers at the same or different companies. They won’t forget you, and that you burned the trust with them already… They won’t want to put themselves in that same situation again.

The reality is that most people (I’ve seen statistics as high as 90%) who accept counter offers leave the job within 6 months.

IT and HR Managers know this. When they’re making the counter offer they know that you will likely be gone within 6 months, so why do they do it? Typically, it’s because it’s cost effective. I’ve seen financial firms give candidates 50k counter offers to get them to stay. As soon as they know the candidate is staying, they start shopping for a replacement. That’s right, they immediately start shopping for your replacement. I have often seen companies take that time to find someone a little junior to the person leaving, someone who will have room for growth (and likely stay longer), and cost a lot less. I’ve seen companies have the senior person train the newbie, and then claim they have to cut costs when they’re letting go of the more senior person a couple of months later… The reality of the matter is it is cheaper for a company to give a counter offer and that raise for 3-6 months then it is to absorb an expensive consulting fee while they look for a new employee. Let that sink in… It is the primary reason that companies make counter offers. It is cheaper for your employer to pay you more for 3-6 months than it is to hire a consultant while they conduct their search. It also gives them the time to find someone they feel is the right fit, rather then having to take the first person who comes along because there is an empty chair. If you have ever heard a recruiter say “I’m working on a confidential search”, that is often why…

Now, are there times where accepting a counteroffer makes sense and works out? Sure, there are always exceptions. But it’s a bad idea frequently enough that you should be very, very cautious before doing so.

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