When an employee resigns, it's common for the employer to counter with another offer in order to persuade the employee to stay. It takes a lot of time and money for a company to find and replace valuable staff, so unless the decision is mutual, the company will want to do what it can to retain the employee. Given today's tough job market, who wouldn't want to be in a situation where two companies want you? Yet the counteroffer can often create more problems than it can solve.
When human-resources professionals and recruiters were asked whether accepting a counteroffer is ever a good idea, most replied with a resounding "no." A few cases were made for taking a counteroffer, but only if done so for the right reasons and in the right way.
"Recognizing all situations are unique and there is no 'one size fits all' answer, the potentially departing employee needs to consider a number of things when faced with this scenario," says Fred R. Cooper, managing partner at Compass HR Consulting.
Why accepting a counteroffer may backfire
You may lose trust. By telling your employer you've either been offered or accepted another position, you're essentially saying you've been unhappy. So even if your company does counter, how can it trust that you won't eventually stray again?
"By resigning, you've severed the bond of trust with your company," says Judi Perkins, career coach and founder of Find the Perfect Job. "It's like catching your partner cheating. There will always be that bit of doubt. You'll eventually leave the company, but next time it will be on their terms, not yours."
Elene Cafasso, president at executive coaching firm Enerpace Inc., agrees, saying, "You could be seen as a 'short timer' and be passed up for promotions, the best projects, etc. Your current employer may just counter [the] offer to keep you around long enough to get your replacement identified and trained."
You can burn bridges. Just as threatening to resign can leave a bad taste in your current employer's mouth, going back on an offer you accepted from another company can sour its view of you as well. Even if your acceptance was oral, it's still viewed as an agreement between you and the company. If you decide to stay put but things don't get better, you've burned a bridge with a company that may have been a better fit.
"If the hiring company has released the other candidates and announced your imminent arrival -- that you then renege on -- you just ruined your reputation with [a] top-rate company in your industry," Perkins says.
Your problem won't necessarily be solved. "If the person accepts the counteroffer and stays with their current employer, there is better than an 85 percent chance that the person will leave the company within six months," says Alan Fluhrer, CEO of recruiting firm Fluhrer & Bridges. "This is due to the fact that the underlying issues have not been resolved."
It shouldn't take a counteroffer to get what you want. It's rarely a good idea to look for a new job for the sole purpose of using it as a bargaining tool with your current company. Not only does that send the wrong message, but it shouldn't take you threatening to leave for your employer to see your value. "What does it say about your current employer if you have to basically blackmail them to get a fair salary, recognition and/or opportunities for advancement? Why would you want to stay?" Cafasso says.
You accepted the original offer for a reason. If you've accepted an offer from another company, you've likely done so after much contemplation and for a variety of reasons. Some may have to do with issues you're having at your current company, while others may be because you see opportunity at the new company. Cooper suggests thinking about the situation like this: "With this new job, I've made 'the cut': I'm the one they want. I've researched the company and its culture and it is someplace I want to be. I want this new opportunity for all the things offered and more -- it provides the financial, emotional, cultural and/or other things missing in my current employment."
When a counteroffer is worth considering
"Obviously each situation is different, but certainly accepting a counteroffer can be very appropriate, if it addresses the 'itch' that caused you to look at alternatives in the first place," says John Millikin, clinical professor of management at Arizona State University's W.P. Carey School of Business. "People tend to listen [to executive search calls] when they are unhappy with current assignments, feel blocked on advancement, have issues with their own management, etc. A successful counteroffer needs to address these concerns, as well."
When it comes to burning bridges with the company from which you accepted an offer, Millikin says there is always that chance. "You can, however, mitigate some of that by simply being as transparent [with the hiring company] as possible. If you were candid about why you might leave, it is easier to tell a convincing story about how your current employer truly addressed the concern."
Addressing the issues head-on
While the answer to whether you should accept a counteroffer isn't black and white, perhaps the best approach is to address the issues you're having at your current company before they get so bad they drive you to leave. If you tell your manager and nothing improves, then you'll never wonder whether things would have gotten better. You can move on to your next opportunity without looking back.