The Truth About Counter Offers

Deciding to move on from one company to another is a multifaceted decision that usually involves careful deliberation, market exploration, discussion with one’s family, and conversations with potential new employers. By the time you have gone through an interview process, received an offer, and decided to submit your resignation, you should feel confident in and committed to your decision.

Replacing a valued employee is a costly and time-consuming process for a company, and many managers will choose to avoid that stress by presenting you with a counter offer. These offers can take several different forms: more money is the most common, but your employer may also promise a new job title or role, more exciting stretch assignments, or extra vacation time.

The truth is, accepting a counter offer nearly always has an adverse effect on one’s career. There are a number of reasons why it is in your best interest to decline a counter offer and move forward with your new career opportunity.

The first and most important reason is that you began looking for a new position for a reason. Regardless of what your company is now offering, that reason has not changed. Ask yourself: why did it take you submitting your resignation for your company to make this new offer? The answer is almost always unacceptable. Furthermore, your employer should be paying you what they think the position merits. You never want to be in a position where your employer is paying you either more or less than they think you deserve; either way, there is a serious miscommunication happening, and it leaves room for resentment to build and damage the working relationship.

From the employer’s perspective, by tendering your resignation, you have demonstrated that you are unhappy, and your loyalty is in question. From that moment on, your fundamental relationship with your managers, your coworkers, and the company overall has changed. When it comes time to award bonuses, consider employees for promotion, or decide which employees should be downsized, your reputation will certainly affect your treatment.

Even outside of your company, accepting a counter offer and backing out of an employment deal with a company have damaged your industry reputation and affected the likelihood that companies will pursue you again. Employers have a lot invested in the hiring process; it takes a lot of time, money, and effort to recruit, interview, and extend an offer to a candidate. If you put a company in a position to start that process over again, it will not reflect well on you professionally.

To be clear, we are not suggesting that you have to accept any job offer submitted to you. However, if you do accept an offer, it is imperative that you stay committed and true to your word, for the sake of your long-term career.

Accepting a new job offer is an exciting time, and while leaving a company is a difficult thing to do, it is important to focus on your new career horizons and not let a counter offer hold you back. As the old saying goes, “Don’t look back. You’re not going that way.”

Included here is a graph published by the Wall Street Journal, illustrating that 93% of counter offers do not work. While we have been unable to locate a source study to verify that statistic, nearly 40 years of experience in the executive search industry have proven to us that the numbers in the graph are realistic, if not exact.