By Beverly Harvey
Ah, you’ve found a really great position … you’ve accepted the offer … and you’ve turned in your resignation. But lo and behold, the senior management team of your current company is offering you an irresistible counter offer. Now what?
Accepting a counteroffer is rarely a win-win situation. Counteroffers are a retention strategy used by companies to keep you on board until they can find a replacement. In making a counteroffer, your employer might appear to be doing you a big favor. You may feel flattered. But, don’t be deceived. A counteroffer isn’t about what’s best for you; it’s about what’s best for the company. You ARE NOT the main beneficiary.
Statistics published by various executive search firms indicate that 90 to 95 percent of the people who accepted counteroffers ended up getting fired or leaving the company in six months to one year.
From The Boss’ Perspective
When you submit your resignation, most likely it will be a shock to your boss. His reaction will be panic and his thoughts may be something along these lines:
- This couldn’t happen at a worse time.
- How will we ever get the project/initiative competed on time without him/her.
- My boss is going to be furious.
- This is one of my best people and his/her leaving could cause serious morale problems with the team.
- I’m working as many hours as I can. I can’t take on his/her load until I find someone to replace him/her.
- This is going to look really bad on me … and my review is coming up
So your boss, and probably his boss, or the Board, develop and present a counteroffer. They could offer you more money, a promotion, international opportunities, new technology, increased benefits, more stock/options, or better working conditions. But think about it, why weren’t you worth that much a week ago? Most likely, with these counteroffer promises, your boss is not trying to buy you back, but is merely buying time until he/she can replace you. Once you accept the counter offer, the employer immediately begins to search for your replacement.
After all, you’re no longer perceived as a loyal team member. You’ll always be perceived as a loyalty risk. The company feels like they’ve been forced or blackmailed to give you more compensation or benefits. Where will the money come from? All companies have salary guidelines and budgets. The money has to come from somewhere in the budget. Will it affect division bonuses? Are your coworkers going to have to forgo their bonuses in order to make up for your raise?
Once your coworkers find out, the relationship you now enjoy with them may never be the same. They may resent it. Most likely you’ll no longer be perceived as a trusted member of the management team. Plus, when promotion time comes up, you probably won’t be in the running. However, when cutbacks are mandated, you’ll be at the top of the list.
A counteroffer may seem attractive because for most executives, starting a new job is stressful. There’s the natural fear of change and the unknown as well as concerns about learning a new company’s culture and complexities, and the degree of risk regarding your success in the new position. Yes, by accepting the counteroffer you will get more money or benefits for doing exactly what you’ve been doing all along.
But think twice. The reasons you’ve decided to leave the company are probably not going to change. Most candidates change jobs for reasons other than money. So, be clear about why you decided to leave the company and ask yourself, will this counteroffer really change anything? Remember, the company is only making the counteroffer so they can keep you on until they find your replacement. Do you really think they’re going to change anything for you?
The Recruiter’s Perspective
The recruiter has invested hundreds of hours in finding, assessing, investigating, and presenting the right group of candidates. When a candidate backs out after accepting an offer, a recruiter stands to lose face with his client company. He will also lose months of time and allocated resources invested in the search, and possibly substantial income.
Why should you care what the recruiter thinks? The value of a good recruiter should never be underestimated. Many recruiters develop career-long relationships with top-performing candidates and can help you achieve your career goals. Most recruiters will avoid candidates who renege on job offers (known as “no shows” in their field) and whose word can’t be trusted. Recruiters are a tight knit community. Word will spread like wildfire and you’re likely to be blacklisted.
The Jilted Company’s Perspective
The hiring company spent numerous hours interviewing you and may have paid your travel expenses and begun investing in you as their new executive. You negotiated the offer in good faith and agreed to a mutually acceptable offer. If you renege on your commitment now, the hiring company loses money. It must restart its search from scratch. By now, the other prospective candidates have long since accepted different positions or pursued other paths. The company will lose months of productivity and perhaps millions of dollars in revenue and market share because the position will be unfilled throughout another search.
Why should you care about the company? Company executives talk, particularly when they’ve been jilted. They may feel revengeful and purposely make a few calls. It’s very likely you have permanently damaged your reputation in that industry.
Be very brief when you give notice. Try to anticipate your boss’ reaction and plan what you’re going to say. Emotions run high when a resignation is received. It’s a rejection! And often times, it’s a reflection on your boss. Try to remain calm despite the impulsive actions of your boss and other executives in the company.
You don’t have to tell your boss where you are going, the nature of the job, or the compensation offered. They may ask you a lot of questions, but you are not obligated to answer any of them. Of course, you don’t want to burn any bridges, so you could say that your new employer has asked you to keep this information confidential. Assume a matter-of-fact attitude and understand that they want to know this information so they can develop a counteroffer.
This is not the time to tell the boss exactly what you think of him and the company. It’s also not the time to tell your boss how underutilized or undervalued you feel. You may need references from your boss, senior management, and your peers sometime in the future.
You’ll want to tell your boss that you’ve made the difficult decision to take another job, and that you came to the decision after much thought and consideration. Tell him that it’s been a wonderful opportunity and that you appreciate all that he has done for you, but it’s time for you to move on. Stand firm!
When you resign … resign professionally, with dignity, and permanently.