what is a counteroffer? pros and cons.

  • resumes
  • July 14, 2020

Picture this: You've successfully danced your way through several rounds of interviews to land an offer for your dream job. All that's left is to notify your boss and give two weeks' notice. Except that there's a hitch. Your boss isn't giving you up without a fight — and before you know it, there's a counteroffer from your current employer inching its way across the table.

As anyone who's been on the receiving end of such a proposition knows: a) it feels extremely gratifying, but b) the experience is often ultimately bittersweet, and can turn downright acrimonious in a flash. Like every game of tug-of-war, there's inevitably friction.

Even seasoned pros quibble about this point: Among executives and HR leaders, 40 percent in one survey said accepting a counteroffer from your current employer is likely to have an adverse effect on your career growth. Yet, in the very same survey, 80 percent said that accepting a counteroffer is, well, acceptable — provided your motivations are purely monetary, that is. So which is it? Yes or no? What’s the counteroffer etiquette? And is accepting a counteroffer sometimes actually a good idea?

We’ll answer these questions and more, comprehensively breaking down the pros and cons of accepting a counteroffer in the following.

what is a counteroffer?

The meaning of a “counteroffer” is relatively straightforward. Basically, a counteroffer is an offer made by your current employer in response to a job offer that has been made by another company. It’s an attempt, in other words, to keep you from jumping ship. As such, perhaps not surprisingly, the most common example of a counteroffer is a pay increase (although title changes, new development pathways and other perks, as we’ll cover below, are also sometimes on offer).

pros of accepting a counteroffer

To be honest, there are very few upsides to accepting a counteroffer. The only real benefit is material: You’ll make more money — at least temporarily. That is, when highly prized employees make a beeline for the exit, reeling bosses have been known to reach for their pocketbooks, since it probably feels like the only card they have left to play.

That said, one cautionary note: Whether you choose to divulge the terms of your offer to your boss or not is up to you, but under no circumstances should you lie about the figure. There are almost unlimited ways that could land you in hot water.

On the other hand, there are multiple distinct disadvantages to accepting a counteroffer, as we’ll turn to next.

cons of accepting a counteroffer

Before you decide to accept a counteroffer, you should carefully consider the following drawbacks. Caveat emptor!

1. more money might not mean what you think

It sure is nice to feel wanted, but why did you and your employer have to reach this impasse for that feeling to be made manifest? Viewed in that light, whatever the counteroffer counts for, it certainly isn't a surefire sign of respect.

Nor does it necessarily indicate that your current employer actually values you, or what you bring to the table. In pure dollars and cents, for most organizations dishing out modest raises now and then, if it keeps people onboard, is almost certainly going to be a cost savings over the long run, given the heavy outlays associated with finding a replacement, onboarding that replacement, training that replacement and so on.

Perhaps most fundamentally, it's probably best if your decision to stay or go isn't based on money alone. A raise of five or even 10 percent above your current salary is nice, sure, but it matters a lot less over the long haul than your professional development and continued career growth.

Concerned you may be underpaid? Consult our salary comparison tool — it's a safer first step before you start digging around for sources of leverage.

2. lingering trust issues with your current employer

Any actively employed professional who's also actively pursuing their next career opportunity with a different organization surely has their reasons for doing so. When that's the case, counteroffers typically only work as a relatively short-term solution (around six to 12 months, by one estimate). They're temporary bandaging, not up to the task of stanching the much deeper wounds.

Worse, some bosses may experience the whole offer/counteroffer dynamic, even when it resolves in their favor, as evidence of compromising disloyalty. And once that trust erodes, the work relationship can easily turn toxic, in which case your chances of promotion have probably gone out the window, to boot.

So if there are any signs that your boss (or colleagues) feel betrayed by your narrowly avoided defection, that's probably all the information you need to know that it's time to move on.

3. lingering trust issues with your would-be employer

Spurned employers, like jilted lovers, harbor grudges. But it isn't simply a matter of pride: Your almost-employer invested in you (time spent interviewing you, getting to know you, perhaps even introducing you to potential future colleagues and so on), and that investment came with opportunity costs, too — all of that was time they couldn't spend with other candidates. And then, just when it seemed like the deal was all sewn up, you apparently had a change of heart. How cold. How unfeeling. Such betrayals are seldom gotten over easily.

Not surprisingly, in an HBR survey of C-suite executives and HR leaders, "diminished trust" and "compromised reputation" — on the side of the organization that had been planning to welcome you with open arms — were cited as the most common outcomes for those rascals who trade offer for counteroffer. Any candidates familiar with the long-term value of a strong personal brand should read in such foul reputational side effects powerful deterrents.

key takeaways

Do I stay, or do I go? By the time you've received a counteroffer, that might seem like a moot question: Wasn't a call of "Abandon ship!" heard loudly and clearly? Didn't you take to the oars accordingly? Ah, but then along came the counteroffer to muddy the waters. Suddenly, everything about the situation looks much less certain.

There's a bright side, of course. Ultimately, whatever you decide, yours is an enviable position to be in — if "between a rock and a hard place" has an opposite, this might as well be it. Just weigh the pros and cons outlined in this article, think critically and you're bound to land on the right foot. In the interim, be sure to check out Randstad's Career Resources Center for more tips and actionable guidance.