How to Manage Counter-offers

How to Manage Counter-offers

It can be flattering to receive a counter-offer from your current employer, however, it’s important to understand why they’re made, how to manage the conversation, when to accept or decline and how to avoid them.

Why counter-offer?

Replacing an employee is both time consuming and costly and you might have a skill set that is harder to find in the market. Realistically, by the time a new employee has been onboarded, your notice period will have concluded leading to minimal training and handover for the successor. Companies will often counter-offer to avoid this scenario and because they don’t want to lose a valuable employee.

How to react?

Listen to what the counter-offer is and don’t decide to accept or decline on the spot. Reflect on why you wanted to leave your job originally. Does the counter-offer fix the problem? A common offer is to increase your pay, however, that doesn’t address a lack of progression or culture issues. Consider why it took you resigning for your employer to offer you what you need? It is also challenging to regain trust with your employer post resignation if you choose to stay.

When to accept?

It’s worth highlighting that research from Seek indicates that 70% of people who accept a counter-offer resign again in the next 12 months. Often individuals are enticed by what is offered in the moment, however, they are disappointed with the longer-term outcome. If the offer genuinely addresses your reasons for leaving it may be worth considering.

When to decline?

Ask yourself – why did it take you resigning to cause organisational change? Why were you not paid more previously? Could you be better off elsewhere? Counter-offers are designed to entice. When you review it, you need to make sure it addresses all your concerns. An extra $10k pay rise, will not change the culture, or provide you with progression. Would accepting the offer improve your experience with your current company? Unfortunately, it can be challenging to regain your company’s trust if you resign and choose to stay, and counter-offer arrangements can cause issues with your peers.

How to avoid?

Be open and transparent with your employer about your requirements and aspirations. Commence your job search knowing that your employer can’t help you achieve these. Keep your reasons for leaving front of mind when you are presented with a counter-offer. There is no requirement to compromise with an existing employer if a new opportunity can provide you with everything you need.

Cecilia White( Director, HR Consulting )

With a background in legal practice, Cecilia has developed strong technical expertise in all matters relating to workplace law, including awards, contracts, disciplinary matters, investigations, equal opportunity and HR policy development. Her legal background is combined with her expertise across all areas of HR management and strategy, as well as significant experience in delivering workplace training.

Cecilia is also an experienced and nationally accredited mediator, specialising in workplace mediation.

With a proven ability to provide advice that is both technically sound and commercially pragmatic, Cecilia’s focus is to develop strong partnerships with clients and work with them to manage risk and liability, ensure compliance, optimise performance and achieve positive outcomes for their organisation, however large or small. She strongly believes that prevention is better than the cure and that strong policies and contracts, early intervention and excellent communication are critical to ensuring effective people management.