Propeo Executive Search

When you announce to your current employers that you are leaving, you will of course be creating a new headache for them.  In this scenario, many employers will consider making a counter-offer. 

You have committed to your new employer, and so you won't entertain a counter-offer.  Therefore the best strategy is to kill it before it happens, by making clear the finality of your decision.  But sometimes it happens anyway. 

It is important that you do not re-evaluate your options as if you have received two competing new job offers, as the counter-offer brings with it very significant downsides that are not present in new job offers.  We would urge you to avoid this trap.  

Employers don't quite mean to trap you - they are just in knee-jerk reaction mode, and you risk trapping yourself in a highly detrimental situation.  We have spoken with many executives on this subject, most of whom have rejected counter-offers at some stage in their careers, and a few who have accepted them.   We can therefore share with you some of their thinking and advice.

The most common reaction of high performers receiving counter-offers is to ask "How come I had to threaten to leave in order for them to give me what I now know I deserve?"  Many executives have told us that they found this almost insulting, and they felt it was demeaning both to themselves and to the employer making the counter-offer.  This feeling is in fact accentuated if the counter-offer is accepted.  There can be a sense of regret afterwards, particularly among the most able and self-confident executives, as upon reflection, a feeling of having been "bought" can begin to set in.

In our experience, executives who accept counter-offers are very likely to leave within six months in any case, and sometimes this is an involuntary departure.  This is because a shift occurs in the relationship between the individual and the employer, as outlined in the following points.       

The employer has been caught on the hop, and has had to increase the individual's package unexpectedly (although this is often positioned as "bringing forward" what was going to happen anyway).  While increasing one person's package may be preferable to having to find a new replacement, a certain resentment of having been put in this position can develop, particularly as time passes.  This may manifest itself in the employer piling more and more pressure on the individual, so that it may feel that it is getting some discernable "extra" benefit in return for the higher compensation.   

Where an employer must manage within tight budgets, the money for the salary hike must come from somewhere - this can be from the individual's next raise.  As soon as the counter-offer is accepted and the employer's crisis is averted, the search may begin for a "cheaper" alternative.  

By signalling a willingness to leave one's current employer, one is also unwittingly declaring what is seen as  "disloyalty".  From this point forward, the individual's loyalty will always be in question, and the most serious impact is on the prospects for serious career progression.  Therefore any gains are almost always short-term only.    

The circumstances that caused the individual to look at a career move in the first place have most likely not changed and are therefore going to be replicated again in the future.  This normally does not take long to happen. 

It is interesting to note the impact that an individual's acceptance of a counter-offer has on their relationship with their peer group.  A sense of special treatment can cause damage to key relationships, and where one depends on the cooperation of fellow directors and function heads, such damage will certainly have a direct impact on one's effectiveness in the job.  

In accepting a counter-offer, an individual can safely assume that the spurned prospective new employer will never entertain him or her again.  This may be less serious than a similar reaction on the part of a good headhunter, who may have been a potential gateway to excellent opportunities in the future.

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