How Counter Offers Can Backfire: Weighing the Risks and Rewards

hyred articles - Weighing the risks and rewards

Counter offers are often seen as a way to retain valuable employees who may have otherwise left for another opportunity. When an employee receives a job offer with better pay, more flexibility, or more responsibilities, they may decide to leave their current job. In some cases, the employee may propose staying if they receive even higher pay and benefits. However, most managers would reject this proposal, and some may even terminate the employee immediately.

According to research by LiveCareer, accepting counter offers often results in problems. For instance, 57% of employees who accept counter offers change companies within 24 months, which raises concerns about the long-term value of counter offers.

Despite this, there are still some Rewards to offering a counter offer, including:

  • Retaining valuable employees who might have otherwise left for another opportunity.
  • Saving time and money on recruiting, hiring, and training a replacement employee.
  • Maintaining morale and productivity within the team, as losing a valued team member can affect the entire team.
  • Demonstrating to other employees that the organization values its employees and is willing to invest in them.
  • Avoiding the potential for a negative reputation if an employee leaves and speaks negatively about the company.

However, there are also several Risks to offering a counter offer, such as:

  • Creating a precedent that employees must threaten to leave in order to receive a raise or promotion.
  • Potential damage to the relationship between the employee and the employer if the employee perceives that they had to resign in order to manipulate a promotion.
  • No long-term guarantee, as the employee might leave anyway, either immediately or eventually after accepting the counter offer.
  • Upsetting the balance of pay and benefits within the organisation, causing rifts among other employees who may become dissatisfied or request raises as well.
  • The employee might feel that the company is only making the counter offer as a temporary solution and that there is no long-term career growth potential within the organisation.

Every company works differently in this day and age, so the pros and cons listed above may not be applicable to all situations. A decision to make a counter offer should always be wisely made on a case-by-case basis after recognising the potential long-term risks and benefits it would bring to a company. 

At Hyred, we advise professionals to ensure job opportunities align with their long-term career goals before accepting the offer for the benefit of both parties: the employer and the employee. After all, teamwork makes the dream work for the growth of a successful organisation. 


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