Why Counteroffers are Counterproductive

Brady Hitchcock
04/03/2024
Find Talent

As professional matchmakers, we can’t help but notice the similarities between the hiring process and the dating process. (More about how recruiting is like romance here.) The counteroffer stage is very much like the phase in a relationship when one party wants out and tries to break up but it doesn’t stick so they stick around, prolonging the inevitable.

The companies presenting counteroffers are the bad boyfriends in this analogy. After months or even years of neglect, they finally come correct. They treat you right, make you feel wanted, needed, loved. Then, BAM! A few weeks later they’re up to the same old spit that made you want to get out in the first place. You’re back to being overworked and underappreciated. You know they’ll hold that big raise over your head for as long as you hang around and they’ll probably start looking to replace you anyway.

Girrrrllll. Uh uh. You can do better. You deserve better!

When it comes to a break-up or a counteroffer conversation, trust is broken, loyalty is questioned, and long-term goals will be reconsidered by both sides. More on that later. First, let’s talk numbers. The data are a bit dubious but clearly show that counteroffers just don’t work.

One particular article published last year estimates that around half of all employees who decide to resign or move to another company will receive a counteroffer and about 57% of them will accept it.

Of the people who do accept, a whopping 50% will be back on the job market within 60 days!

Even more incredibly, 80% of all employees who take a counteroffer will leave the company within six months and 90% within one year.

While the author admits, “There are a lot of statistics floating about on the internet regarding counter offers and the cost of replacing employees. It can be difficult to find the original sources for some of them…” it is common industry knowledge that people who are looking to quit or move on are going to quit or move on. In their minds, they’re already gone.

An article by Harvard Business Review from 2016 cites research showing that around half of employees who accept counteroffers are out the door within 12 months. Since the article came out, particularly over the last four years, the talent acquisition market has shifted significantly in favor of candidates. Meaning that they expect more from their employees than they used to and are more likely to jump ship to get what they want. So even by conservative estimates, there’s a very good chance that anyone who makes it to the counteroffer stage already has a foot out the door.

It makes sense. If all was well, a counteroffer conversation would never make it to the table.

Trust is broken and loyalty is questioned

Even if you have a wonderful working relationship with your manager and company higher-ups, they will question your loyalty and their level of trust in you will decrease. Even worse, they’re likely to be personally offended and take it as a slight to them that you were open to new opportunities. According to a statistic I just made up, there’s a 90% chance you’re overestimating the level of emotional maturity these guys possess.

Sometimes the counteroffer is merely a stall tactic on the company’s part so they have time to find a replacement for you or to make necessary adjustments to the org chart so they can let you go later. If they understand the way things work, they know that you’ll probably leave soon anyway. Either way, accepting a counteroffer leaves you susceptible to being first up on the proverbial chopping block.

Long-term goals will be adversely affected

Say it does work out and you don’t leave or get the boot shortly after. That’s great but it’s highly likely your future plans at the company (and their plans for you) will take a major hit. After receiving a salary bump per your counteroffer, you aren’t likely to be considered for another raise any time soon. The fact that you were looking to leave is likely an indicator that you weren’t being paid what you deserved before so there may be deeper issues companywide regarding compensation.

Someone who is thought to be open to opportunities elsewhere is also not as likely to be promoted when an opportunity becomes available. “Lack of opportunities for career progression” has always been among the top reasons people come to us for help finding something new. If it were just salary, they’d feel comfortable asking for a raise. It doesn’t make sense to stick around for a bit more money if you’re just going to be stuck.

In the end, it doesn’t solve the underlying issue

People consider leaving their jobs for myriad reasons. Pain points can range from being overworked to being under-challenged to having to deal with Brad in Sales every day. Most often, the problem can be traced back to management.

Say it with me, “People don’t quit bad jobs, they quit bad managers.”

On a rare occasion, a counteroffer includes a new role, new title, or some type of promotion but the overwhelming majority of the time, the only change is a salary increase. While mo’ money doesn’t necessarily lead to mo' problems, it won’t fix whatever was broken. Chances are, finding a role better suited to your needs elsewhere will lead to greater long-term fulfillment and satisfaction than staying in your current position for a few bucks more.

Of course, as recruiters we naturally hate counter-offers. When a job offer is on the table, we are a fun, playful mob of mongooses preparing to celebrate! Counteroffers are terrifying, toxic, dead-eyed cobras set on ruining everything. But natural biases aside, it is a fact that counteroffers are counterproductive. They’re not good for employees or employers. They are merely temporary bandages on wounds that have been festering too long and need some real attention.

Whether you’re a job seeker or a hiring manager, we’re here to help you navigate all things talent acquisition, including how to deal with (avoid) counteroffers from either side.

Get in touch today to get started!

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