Are Counteroffers a Risk Worth Taking?
December 2, 2024 – Should you take advantage of a counteroffer? If you’re on the job hunt, a counteroffer can be a tempting proposition, after all, what’s not to like about being offered a competitive salary raise or promotion, explains Toronto-based executive search firm Ivy Group in a recent report. “While these enticing incentives may make you feel valued, a counteroffer is rife with potential risks you should take into account,” the firm said. “Often, a counteroffer is a staff retention tactic and a last-ditch attempt by your employer to prevent you from moving to a new company. It doesn’t always mean your workplace situation will improve in the long run if you accept.”
As recruiters, Ivy Group has seen counteroffers play out many times to varying degrees of success. With both loyalty and trust at stake, accepting a counteroffer is rarely a lasting win for either party, the report says.
The report points to this statistic from CEB Inc. (now Gartner): On average, 50 percent of people who accept a counteroffer leave the company within 12 months. “You have to ask yourself whether jumping ship is really worth it,” Ivy Group said. “Will a salary bump or a promotion really change how you feel about your current job and company? Will you still be satisfied with your job and duties? How will your relationship be affected with your boss, now that they know you were job-hunting?”
It’s also important to identify the real reason behind why you are looking for a new job, the Ivy Group report explains. Sure, making more money may be the main driver for most, but other factors play heavily into it too. A recent Canadian survey from Monster involving more than 1,800 respondents found that people resign for a variety of other reasons that go beyond money (the most common reason). Other reasons include a lack of trust in senior leaders, a lack of work-life balance and an unhealthy work culture.
“In those cases, an accepted counteroffer is not going to change the root cause of job dissatisfaction,” the Ivy Group report said. “If you’re thinking of switching jobs, speak to your employer first (if appropriate) before you start looking. Communicate clearly and speak up if there’s an area of your work or role that could benefit from some change, progression or improvement. In today’s competitive job market, employers and companies want to retain staffing levels and improve employee satisfaction. By being proactive in your career, you might just find a compromise or solution with your employer, plus it gives you the chance to make a strong case for a salary raise or promotion. “
Related: Here’s Why Counteroffers are On the Rise
From Ivy Group’s perspective, it’s best to “fear” the counteroffer and ask yourself what workplace values are important to you. In the firm’s experience, employees who accept counteroffers are often seen as a flight risk by their employers. “Once this happens, it can be hard for employees to regain the trust of their employer,” the firm said.
The Rise of the Great Counteroffer
Most people have heard about the “Great Resignation” or the “Great Reshuffle,” but Grey Search & Strategy, among other search providers, say many organizations are now experiencing what they call the “Great Counteroffer.” The number of counteroffers has increased over the last year as employers are throwing everything they can (money, incentives, titles, etc.) at employees to keep them with the company, according to a new report from Grey Search & Strategy’s Brian Bjorgum. “This in turn creates a situation where the employee/candidate must decide between taking the new opportunity they originally were seeking, or staying with the company they weren’t completely satisfied with,” the report said.
Both employer and employees will experience many emotions when making a decision that has a significant impact on their life. Grey Search & Strategy offers seven common emotions of change and how they coincide with making a career change or accepting a counteroffer!
If you are presented with a counteroffer, Ivy Group cautions you to think and act very carefully. You may even want to enlist the help of a career coach to help guide you through it. Ultimately, Ivy Group recommends you weigh all the pros and cons and take into account factors such as your career goals, values and your professional standing with your current employer, to help make the right decision.
Boutique Search Firm
Ivy Group is a boutique recruitment firm offering executive search for senior positions. The firm was founded by Tracy Posner, Emily Murgatroyd, and Catherine Graham. They have a track record of placing board directors as well as chief and senior executives across multiple sectors.
Ms. Posner has spent almost two decades building a track record in attracting and hiring top talent for senior roles while working at Deloitte Canada, Caldwell Partners, Odgers Berndtson, Robert Half International and TWC International Executive Search. Ms. Murgatroyd has built a career working with innovative and pioneering companies in technology, digital marketing, consumer goods and cannabis. Ms. Graham has track record of placing board directors, chief and senior executives across multiple sectors. She has over 20 years of experience from Caldwell Partners, Odgers Berndtson, Spencer Stuart, and McKinsey and Company.
Related: Navigating Counteroffers: What to Know as an Employer and Employee
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
