Why You Should Never Accept a Counteroffer

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After you have accepted an employment offer from another firm, your current employer may offer you more money to tempt you to stay. “What should I do if they offer me a higher salary?” This is one of the most common questions attorneys ask when preparing to give notice at their current place of employment. If you are considering accepting another job, make a final decision about leaving before tendering your resignation. Counteroffers are common, and you need to be prepared with a response if one is made. Before resigning, ask yourself: “If my employer offers me X to stay, how will I respond?” Compensation is a large factor in deciding what job is best for you, but a last-minute counteroffer shouldn’t change your decision to leave a job. Most legal recruiters and human resource experts counsel never to accept a counteroffer. Here are five things to consider if you are preparing to resign or fear you may be tempted by a counteroffer.

  1.  If salary is the only reason you are leaving your job, you need to negotiate not resign.** If your salary is the reason you are considering a new position, negotiate for a higher salary before looking for a new job. If you are underpaid and negotiation is unsuccessful, it might be time for a move. When asked by employees for a raise, some employers will respond that is it not in the budget or will give another reason for denying the request. Yet when an employee gives notice, the same employer might then offer the previously denied raise. Although this may seem like a positive outcome – you get to stay at the job you are at with the compensation you want – be careful. Why did it take the threat of leaving for your employer to offer you better compensation? If you need to threaten to resign for future salary increases, you are in trouble.
  2.  Even with a raise, the bottom line might not change.** Some companies or firms may offer a higher salary to get you to stay, but then adjust bonuses or other benefits to make up the cost.
  3.  Underlying issues will continue.** The reasons you decided to leave your current job likely will not change with a one-time salary increase. For example, perhaps you decided to leave your current job because you feel undervalued. When you tell your boss you are leaving, he or she may offer you more money, talk about how much they like you, and confess they had no idea you were so unhappy. Such comments and promises may make you feel valued; however, if the company really valued you, why did they only choose to tell you as you were walking out the door?
  4.  The company or firm likely will not value you more.** Why is the company offering you a higher salary as you are leaving? Has your value to the company suddenly increased? No. If anything, your value has decreased. The company now knows you were prepared to leave and you are not committed to the organization. Replacing employees is expensive and time-consuming. The counteroffer is more likely motivated by a desire to avoid the hassle of filling a position or being left shorthanded.
  5.  Trust will be broken.** Even if you offer a thoughtful and carefully worded resignation, the trust between you and your employer will be broken. Many individuals who accept counteroffers later report that their job became very uncomfortable or that they were the first to be let go during layoffs.

Note to employers: Do not propose a counteroffer if an employee resigns.

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We get it. It can be difficult losing an employee. It may seem easier to incentivize a current employee to stay than to start all over again with someone new. However, this approach almost always backfires. It is beneficial to have a standard practice in place to guide how to handle resignations. Be gracious, wish them luck, and start looking for the right person to fill the open position. The moment an employee is walking out the door, it is too late to try to win them back through changing your approach – at least with that specific employee. Ask them for feedback, use it as a learning experience, and move on.

If you value your employees and don’t want to lose them, evaluate your employment practices and take employee feedback seriously. If you cannot give a deserving employee a raise when they ask for one, perhaps due to budget concerns, be transparent and explain the situation. Salary is an important part of making someone feel valued, but it is not the only way. Natalie Thorsen

Tony Vain Investigations
Golf Expert Witness

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