The counteroffer strategy typically lies dormant until talent shortages mount. Then, they start popping up like mushrooms after a rain. Like mushrooms, some are tasty, while many are detrimental to your career; some are deadly damaging.
We are in a time of a fairly severe talent shortage across the IT assurance disciplines and cybersecurity. And, predictably, counteroffers are starting to be a thing once again.
If you are looking for a new job, thinking through the counteroffer scenario is must-do part of your overall preparation. You cannot afford to wait until it happens because getting to the place of an offer will have already been quite the journey and investment of headspace. A counteroffer from your current company adds another layer of complexity, confusion and distraction to the entire process of resigning and moving on. It’s critical to have played out this scenario in advance, and to have a game plan (or plans) at the ready.
Conventional wisdom holds that counteroffers can seem appealing but usually backfire. There is research behind that. In a Harvard Business Review article, Kelly Kay and Michael Cullen lay out important findings from a survey on counteroffers. Notably, interviewees for this article responded that counteroffers work out well in 5 percent to 25 percent of cases.
Important to consider is the harm accepting a counteroffer could do to your internal reputation, and the decrease in the trust your management has in you. About 80 percent of senior executives and 60 percent of HR leadership surveyed by Kay and Cullen said that these were major areas impacted by the acceptance of a counteroffer. Additionally, your organization may walk away feeling like they’ve been “blackmailed” into offering you more salary or other concessions. All these things can lead to your name being on the layoff list if your company reorganizes or suffers a change in fortunes.
It would be great if you could say that, no matter what, you just reject the counteroffer. But it is rarely that easy. There are often nuances to the overall situation, both in the offer that you are holding and the counteroffer that your company is making.
Thinking it through
Let’s go through the process of thinking this through. This is the exercise to do BEFORE YOU GET AN OFFER.
First, why did you start looking? Typically, there is a problem that your company can’t fix. A commute that is too long. Too much travel. A dead-end role. A toxic culture. A horrible boss.
“I love my company; I just can’t stand my boss.” If there is a possibility that your company can fix the problem (e.g., different boss), and you are actually open to solutions, you should be having this internal conversation NOW, before you resign.
Companies can’t quickly or easily change their culture, their management style, their philosophy, or the tone-from-the-top or their HR policies based upon the conversation given at someone’s resignation meeting.
If you had a legitimate reason for leaving, you still do. Will the company be able to solve your problem by coaching a problematic micro-manager? Offering group counseling to a dysfunctional team? In nearly every situation the answer will be no.
Turnover is costly. Companies and managers want to avoid high rates of attrition. HR typically coaches managers on strategies for retaining employees, and in some cases, managers’ bonuses may actually depend on their ability to keep turnover low.
You will need to think about how much you trust your leadership to do the right thing if they do offer to fix the problem. Many times, promises are just talk meant to appease. And even if the root cause is addressed, what kind of blowback might you expect from an angry manager or team if you end up staying?
Bottom line: If your organization cannot fix the problem and you are not open to entertaining a solution they may propose, then hear me now: no amount of money is worth it. Don’t let the extra money that you could put toward your mortgage or paying off your student loans distract you from your mission.
Can a counteroffer work?
When might a counteroffer actually work? This is harder to get one’s arms around. What I have observed in the past is that people who are high-value contributors to their companies, with strong positive internal reputations and good relationships with their leadership, have a better chance of a counteroffer working out in their favor.
Usually, the person’s reason for looking externally is about growth, opportunity or a change of direction. They typically have done a pretty good job of talking with appropriate people about their goals, done their research and decided that they should take a shot elsewhere.
It’s not about the money. And that’s a critical point. While you may be looking for a pay increase in your next role outside your company, using a counteroffer to gain a pay increase is generally not advisable. As noted above, your reputation and trustworthiness will probably take a hit, and there is the huge risk of sour grapes on the part of your manager or organization that may have major downstream impacts.
But what about the money?
Okay, but sometimes it is about the money. There are cases in which a pay raise has been discussed, and it’s overdue (or the company knows that its pay ranges are below market and has been slow to fix this). But, you have to like your job (except for the pay), like your company, have a great relationship with your boss and leadership, and be viewed as a terrific asset to the organization to gain the pay increase and avoid likely negative repercussions. There is a lot to consider in each specific case, so be sure to do a thorough analysis of your situation.
When a highly valued person announces a resignation, management is usually very keen to hear about why. When counteroffers typically work out, it is because there is a new opportunity or corporate initiative that is a match for this person and a fit to their goals. Generally, this is an opportunity that had been waiting in the wings, management had not yet pulled the trigger on it, but given the risk of losing this talent, they see value in accelerating their timeline. Because it is a great fit for the person, that individual will crush it in the new role, and it’s a win-win for everyone.
Parenthetically, I have seen cases of a rock star in public accounting or consulting that needs more work-life balance or less travel, and there doesn’t appear to be any solution in sight. But, when a departure from the firm is brought up, they find that their management is willing to work with them because they are such an asset to the firm. In most cases, it is better to work toward a solution with your leadership before coming to them with a resignation letter in hand.
Nipping the counteroffer in the bud
The meeting where you announce your resignation plan to your manager (or management) and give two weeks’ notice is your meeting: You need to be firm, resolved and poised. You—not your employer—are the one in control of your career. You want to stay on point, avoiding lengthy back-and-forth conversations and signaling a lack of resolve that might encourage your management to make a counteroffer.
It is very helpful to have a prepared statement that you have rehearsed until it sounds calmly professional. Something like this works well:
“Thank you for your concern and input. I’ve already made a career decision to join another company and have given you the professional courtesy of a two-week notice. I expect you will respect my professional judgment regarding my career. Let’s start figuring out the best plan for transitioning my role.”
The long-range perspective: The potential for counteroffers will be a staple throughout your career. When you know yourself, your goals and your worth, you will be able to navigate these situations when they arise. The critical takeaway message is to be prepared and not in a position where you might be blindsided. You want your departure from your organization to be peerlessly professional. Knowing how to leave is just as important to your career sustainability as knowing how to start that exciting new role in front of you.