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Counter offer: Why not to take it
A counter offer is a response to an initial offer that could be accepted if some amendments are made to it. They can occur during many different kinds of negotiation, though this article will focus on counter offers related to employment.
Counter offers usually occur during salary negotiations during a hiring process, with both parties able to counter an offer made by the other. They can also occur between employer and an established employee when renegotiating a contract or salary adjustment.
Frequently, counter offers are made to established employees who want to leave a company. However, not all counter offers are benign. In fact, a counter offer could be made as a stalling tactic while the employer finds a replacement. Accepting a counter offer can also lead to low morale and a lack of career progression.
Here we look the different counter offers you are likely to experience in employment, and why you should be cautious of them.
Counter Offers in Employment
In an hiring process, a candidate may view their skills as worth more than the initial offer made by the company they are interviewing with, and thus make a counter offer that they are more willing to accept. Perhaps more often, a candidate may propose their expected salary which is then countered with a lower offer which the company deems more appropriate to their budgetary constraints.
Another example is an established employee requesting a pay rise after a period of time without one, or after successfully completing a project or otherwise demonstrating their increased value to the company. The employer then evaluates the request and either accepts it or counters with an amended offer.
An employee may also hand in their resignation, which the employer then counters with a pay rise or other contractual improvements in an attempt to keep the employee at the company.
Counter offers will always be either accepted, rejected, or countered again. Such exchanges can result in a back and forth until a compromise is achieved, or until one or both parties choose to walk away from the deal.
In both situations, as either a candidate or established employee, there are significant reasons to be wary of accepting a counter offer. Let’s look at both situations in more detail.
Candidate Counter Offers
Ultimately, you will be working for less than you believe you are worth if you accept a counter offer lower than your requested salary. Assuming your demands are reasonable, then you will be working with the knowledge that you would be better remunerated elsewhere. This can and will affect your motivation and morale.
Also, accepting the lower offer means beginning work which will hinder your capacity to seek and interview for a role with better pay.
Employee Counter Offers
There are many more reasons for employees handing in resignations to be wary of counter offers than there are for candidates and employees simply seeking a pay rise. With the latter two, it is simply a matter of money and morale. However, accepting a counter offer as a resigning employee can have short and long term consequences.
First of all, a counter offer doesn’t necessarily deal with any underlying issues that contributed to the resignation. Increased pay is attractive and can make you re-evaluate your decision, but the other problems will still be there.
Employers are also likely to question the loyalty of an employee who only stays because of a counter offer. This could affect future opportunities such as valuable training, promotions and other career advancements.
Also consider that if your employer counter-offers your resignation with improved terms, then it is likely that those terms were always acceptable but the employer knowingly paid you less than your worth. This brings their integrity into question and bodes poorly for your relationship from thereon in.
Moving On from a Counter Offer
If you have reached a point in your career where a counter offer is being made, then it is probably better to consider your future elsewhere. The money you are worth will be available at another company. That other company will also value you correctly from the moment you walk through the door, instead of waiting until you threaten them with resignation.
For candidates, you will need to be sure your demands are reasonable by conducting research into your sector. If your demands are reasonable and a hiring company refuses to meet them, then it is not a good match, and your search should continue.