Counter-offers: a short-term solution

I have noticed a substantial increase in the number of candidates who, upon resigning from their role to move to a new company, are receiving a counter-offer from their existing employer.

Whilst this has always happened to an extent, I began to notice a dramatic increase in occurrence at the beginning of 2015, and it has continued to accelerate to the point where the majority of the permanent recruitment process now involves a counter-offer.

So why is this happening now?

There are other increases in the market which are prompting this change. There are more clients looking to recruit permanent staff now than there have been for a decade, and, due to fierce competition for talent, many vacancies are going unfilled for several months at a time. Those clients who are already in need of extra staff certainly can't afford to lose their existing workforce and, as a short term solution, a counter-offer is made in order to maintain the status quo.

Usually, it's a straightforward increase in pay to 'match what they've been offered elsewhere' but eliminate the hassle and stress of having to move companies to achieve it. Increasingly though, clients are also offering the option to work flexibly or from home, as well as making promises of more rapid progress within the company.

The issue, however, is that no matter how tempting it might look at first, accepting a counter-offer is almost always counterproductive. Whilst only 20% of candidates actually accept the counter-offer, our recent market insights research (which you can download here:) found almost all of those who do accept end up leaving the company within six months anyway.

While a counter-offer may solve some of the employees' issues, there are a number of reasons why accepting one doesn't always work. The manager may feel like he cannot put his faith in that member of his team, and when word gets out that a member of the team effectively got a pay raise by threatening to quit, morale in the department can be negatively affected. This can even encourage resentment towards the person by teammates that may percieve it as "disloyalty".

I've also noticed that a majority of those who accepted counter-offers due to promises of progress say they were sold an empty box - months later, few of the promises have come to pass and the discontent that made them originally look for another job is still very much present.

Now more than ever it's vital for you, as a candidate, to consider what you will do in the case of a counter-offer before committing to looking for another job. If the problem might be resolvable by the current employer, it's worth having that conversation first. If your employer is only willing to play ball when the threat of resignation creeps into the conversation, you should be wary of your long-term prospects with such a company.

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