The Perils Of Counter-Offers - Should I Stay Or Should I Go?

6 min

In the majority of organisations, the risk of losing highly skilled employees is an issue of both strategic and competitive advantage.  There is a clear recognition of the fact that great talent is key to business success and as a result, recruiting and crucially retaining that talent is key.  Therefore when employees leave or vote to resign, individual organisations will historically attempt to retain that person, in some instances at any cost.

So why do people actually decide to leave an organisation? Herzberg undertook a study of motivation at work with professionals across a range of organisations and found two factors:

Sources of dissatisfaction.  These consisted of working conditions, salary and company policy.

Sources of satisfaction.  They are achievement, recognition, promotion and responsibility.

The former he called his hygiene factors, the latter he called his motivation factors. Very simplistically, individuals ultimately strive for job satisfaction, challenge, achievement and recognition.  Whilst money and status is important to all of us, it does not provide eternal happiness.

So what happens when you hand your notice in? The organisation suddenly realises that you are a scarce resource in a challenging market and they are commercially exposed. It is the realisation that they need you a lot more than you need them.  

However, what you need to be clear on is WHY you are moving. Is it because you are not paid enough? In reality it is not based purely on salary. Is it because of inter-personal relationships between you and your managers? Again, in reality probably not, because these don’t happen overnight.  Or is it because of the company policy of training and development? Once more the reality is no, because these have been in place since you joined your employer. The reasons are most likely more deeply ingrained than this and revolve around the MOTIVATION factors highlighted above.

In an attempt to retain scarce and valuable resource, employers are likely to do one (or a few) of the following things when you hand your notice in. However, there are some key questions you will need to ask yourself when these counter offers are made:

Offer of up to 30% increase of the basic salary / guaranteed bonus scheme

If you were worth this amount why did they not offer this earlier?
What will your company expect for the increase in the salary? (more working hours, more pressure etc.) 

Offer of a new position within the organisation

How does this role suddenly exist and why was it not offered earlier?
How credible is the role (is it just a figurehead role)?
Will it really give you the responsibility and recognition you are looking for?
How will other employees react to this ‘new’ position?

Offer of a fast track development programme / personal training development

Why was this not offered earlier?
Will this really help to fast track your career path?

Provide opportunity to transition to other departments

Why was this not offered earlier? Will it enable you to achieve what you want from your career?

Many organisations will try to make you feel that the place you work is far superior to others, particularly competitors. However this is actually a very rare situation.

The reality is that rather than offering these options to benefit you as an individual and to ensure your future career success, they are doing this for the following reasons…

  • It is far easier and cheaper to retain than recruit
  • People leaving gives morale issues within the company
  • You may be particularly important to a customer or “brand/product” development 

The question one has to ask at this stage is “So what’s changed?”. As Herzberg has proven and through our own recruitment experience, despite what your employer may now be offering you, nothing has changed and certainly not related to the more crucial ‘MOTIVATION’ factors highlighted. The main thing is that you have exposed your company to be at risk.

In reality, what happens to those who accept their counter offer and stay looks quite bleak:-

  • 92% of candidates who stay with their current employer will look to leave again with 6 months
  • 99% will look to leave within 1 year
  • Most candidates experience “exclusion” and distrust from both senior managers and fellow employees
  • Most companies fail to deliver on their “career” promises
  • Promises of “company” cultural changes do not happen
  • They have automatically forfeited the chance to join the company that originally made them a job offer

When you accept a new job offer and hand in your notice, you will most likely have mixed feelings; excitement at the new opportunity and optimism and enthusiasm for your career going forward. However these feelings will be mixed with uncertainty that you have made the right decision, guilt towards your colleague and customers for letting them down and a feeling of betrayal towards your current employer. It is at this point of mixed feelings that, when faced with counter offers, you may start to question your original decision to move.

So, before you even start looking to move careers, it is incredibly important to really think about why you want to move.  Is it about money, is it about status or is it about yourself and your own career? When you hand your notice in, you have to be prepared for the fact that employers will tempt you back with added benefits, enhanced positions, and future promises. However, the question you need to ask yourself is that if they had not done it before, why are they doing it now? And if they are doing it now, who is it for?  At the end of the day, mankind has a desire to grow and develop themselves. We all want to be the best, but if our employers prevent this, we seek to work somewhere that our ‘motivation factors’ can be met.

Before you enter the marketplace, think of the following:-

  • What does your current company have to offer?
  • What are you looking for outside your current employer?
  • What can your current employer not provide that you want?
  • What is the cost to you in financial and career terms in either staying or leaving?
  • What is the cost to your employer in financial terms of your staying or leaving?
  • Prepare for and expect attempts by your current employer to retain you, in some instances, at any cost

By assessing and answering these prior to looking for a new position, it will ensure that you know you have made and are committed to the right career choice for you. You will therefore be prepared for the ‘counter offers’ by your current employer, and know how to deal with them. This should help to ensure you make the right choice for your career and ensure that you are not part of the alarming statistic of 99% of people who stay with their current employer, only to look to move again within 1 year.