“If you love me, you’ll stay” Counteroffers are back!
Now that we’re back to white-collar unemployment rates at the “transitional” level, it has become a candidate-driven job market again, similar to the period of 2003-2008. Employers are having trouble finding and keeping talented employees, so they have dusted off the age-old retention tool used to stop employees from leaving: the counteroffer.
It’s a natural and predictable response to a difficult situation that employers face all the time – how to fix an immediate problem of having an unexpected vacancy? The quickest and easiest solution? Convince the valued employee to change their mind by: paying them more money, offering to alleviate their pain / complaint, or both. If the employer can get the employee to stay that will at the very least buy some time to develop a succession plan that will minimize a pro-longed vacancy.
Sometimes it works. An employee will accept the raise and / or the promises to change. And sometimes it even works out for both parties: the employee was actually underpaid and / or the complaint they had was legitimate and fixable. The problem, however, is that the employee had to hold a metaphorical gun-to-the head of the employer and threaten to resign in order to get those things, so the relationship can never be the same in the future.
That’s why things often don’t work out in the near-term or long-term for the employee who accepts a counteroffer. In addition to the altered relationship, the reality of the counteroffer deal is that the extra money has to come from some budget – typically an FTE merit increase for the employee that is paid sooner than scheduled – and the future raise doesn’t happen. The other problem is that those promises for change / promotion / direct reports that were made to blunt the departure too often don’t materialize in the agreed-upon timeframe.
We’ve even heard about the guilt-trip counteroffer, where senior management reaches out to the departing employee to try to shame them into staying. “How can you do this to us?” “It’s a small industry – you don’t want to burn bridges, do you?” The most interesting tactic of late, however, is the delayed counteroffer, where the employer waits a couple of months after the resignation and contacts the former employee to see how things are going in the new job. Very often, if the new employer has a weak or non-existent on-boarding program, the new employee is panicking that they have made a terrible decision. They are ripe to be convinced to come back to their old job, with more money, and avoid a “hole” in their resume.
Why does all this matter?
As an Executive Recruiter it’s completely self-serving for me to advise employees to never accept a counteroffer just to preserve a deal I’m trying to broker. Sometimes it may simply be the wisest choice for an employee who doesn’t want to take on the risk of making a job change. My advice for those employees who find themselves less than satisfied in their current situation is to have a candid conversation with a trusted manager and explain your concern. See if it can be remedied in a reasonable way, without threatening to resign or appearing like a whiner. Try to fix things BEFORE you begin looking to make a change so that the employer has a legitimate chance to do the right thing. A good manager is always looking for ways to improve the job-satisfaction of valued employees.
In those unfortunate situations where the problems can’t be fixed, then a hard-working, competent employee owes it to themself and their family to proactively manage their career, and sometimes that may mean making a job change. But just remember, once you go down that path and agree to accept a new challenge that will meet or exceed your needs, you should be absolutely committed to it. Like a mentor of mine once told me, “good opportunities knock, they don’t kick the door in.” That great job that you may turn down to accept a counteroffer is perishable. There is no guarantee that another one will come along that will be such a nice fit and get you that excited.
We know that making a job change can be stressful and even traumatic sometimes. You have to build new relationships and political capital, you have to say goodbye to friends and colleagues you respect and admire, and the future is often uncertain. Counteroffers capitalize on the emotional upheaval many people feel during this time of transition. And later on, when the memory of the short-term raise has faded and the promises of change fail to appear, I will often get a phone call from the employee who accepted the counteroffer, explaining that the environment has become unbearable and they have to get out. Now you’re dealing from a position of relative weakness rather than strength – hiring managers typically don’t like candidates who are running away from something, and they certainly don’t make compelling offers to them.
So if you accept a good job offer for an opportunity you’ve thoroughly vetted, and you’ve determined that the timing is appropriate to make a well-conceived job change, take the job and don’t look back. Sure it’s a little nerve-wracking and inconvenient for a little while, but that short-term discomfort will yield handsome long-term dividends. Sometimes you have to get off one bank of elevators, cross the hall, and get on another elevator that goes to a higher floor. It’s all part of the risk-return analysis we all face in managing our careers. I still haven’t heard of anyone on their deathbed look back on their life and say, “I really wished I’d played it safe.”