So, you’ve landed a new job, handed in your notice, and you’re about to start packing- when your boss calls you in and offers you a pay rise if you’ll stay. What do you do?
You might have heard it a lot lately-it’s a job seekers market right now. There are huge demands for workers in many sectors in many sectors, so it could be a great time to be exploring your options and applying for new roles.
But what if your current employer puts forward a counteroffer- that is, better pay or conditions to keep your current job. Do you stay or do you go?
Why employers make counter offers
Workplace culture expert Jade Lee says its understandable for organisations to make counter offers because they don’t want to lose valuable employees. Organisations are coming to realise that they can’t easily replace you in this market and not in the notice period and quite often they’re worried about the workload and what that means for the existing staff.
In the short term, it can possibly work for the employer. But now you know that you were being paid less than the company was willing to pay for a period, and this can also lead to resentment.
Why you might like to rethink that offer
One quarter of people report that they have been made a counteroffer at some stage, research at SEEK shows. But accepting such an offer may be more of a quick fix than a strategic move. In fact, 70% of people who accepted a counteroffer left that employer within a year. It might not have anything to do with salary, it could be the culture/environment of the organisation that is leaving you dissatisfied and in my experience no amount of money they throw at you will fix that-the problems that were will still be there.
When a counteroffer might work
A counteroffer can be the answer to your problem in some circumstances though, but those parameters are narrow. There can be some benefits to accepting a counteroffer if you are generally happy with the company. If the only reason you were leaving was because the company couldn’t meet your financial goals, then a counteroffer can solve this missing piece. But as I highlighted above if your current employer only offers more money and doesn’t address other concerns you have with your position, this could be a problem.
Money will not sustain someone long term if there are other factors, like no progression or problematic workplace relationships, that are contributing to you wanting to look elsewhere.
We see it all the time in our capacity as recruiters I had a young accountant who was treated badly by his partners in a firm. He felt undervalued, burnt out and taken for granted. I was absolutely flabbergasted when he turned down a role that he had accepted, for a $10K counteroffer and a corner office at his original firm no less. Six months later I get the call from him he was ready to finally make a permanent move, as nothing had changed, and the extra money had become meaningless.
Using a job offer as leverage
If you’re planning on using a job offer to encourage a counteroffer from your current employer, you’re not alone. Only half according to SEEK who accepted a counteroffer intended on changing jobs rather than using it as leverage.
So, while a counteroffer may seem flattering, and the extra money or perks can be tempting, it may not address the reasons you started looking around in the first place. So, before you start looking around for something new its much better to address concerns with your manager proactively, prior to looking for other work. If the concerns are not addressed at that point, they’re unlikely to be addressed once an offer is on the table. Then it might be time for a fresh start.