Executive Centre
Overview

Lure of the counter offer & after effects

Chairman of a Tier I Software services firm decides to make an offer to a candidate for the role of Head- Corporate Strategy & Marketing. The candidate is the Managing Director of a firm which is a group company of a large Indian conglomerate & is at a salary of 120 L with additional incentive. The client offers him a salary of 140 L with a guaranteed bonus, variable & stock of the company at a discount. The candidate displays all positive signals & commits to join within a month. With only a week left for the candidate to join, he sends a long mail outlining reasons for his inability to join! He decided to stay back, giving in to the counter-offer made by his current employer. It is another story that only after 7 months, he was back, requesting if he could be taken in for any other senior role within the group… at 140 L??

The pressure to accept a counteroffer can be enormous. A straight increase in salary - usually to meet or beat your new offer - additional company benefits, a sought-after promotion or new job title, additional responsibility, promises to rectify everything that ticks you, a change in role, more involvement in strategic decisions, or any combination of the above. Of course, one would like to accept this as flattery, a sign of the person’s unrivalled importance and value to his employer, a definite signal that they'll stretch to serious lengths to keep him.

Yet, let’s look at what is going on from an employer’s perspective by understanding the logic behind the counter-offer. Your resignation is coming at an untimely moment; they are not prepared to replace you with someone who can step up and do your job. The cost of replacing you, the time and the effort (how many resumes will need to be read and people interviewed before they hire someone who they will need to train—AND they may have to pay a higher salary than what you were earning) for a person who doesn’t know what you know. You can see that it’s surely not about you!!

Few counteroffers should be considered, let alone accepted. By interviewing, the person has shown that he is looking for better prospects. It is not a wise thing to be back in the job market again in a few months because the core issues that caused you to look for a job were not resolved. In the minds of recruiters, your thinking is not stable & you are unable to make decisions.

Counter-offers are very common in the currently hot job market in. Statistics on how many times it happens are hard to find. However, while researching the counter-offer issue, one fact just keeps on popping up. Most people who accept a counter-offer have subsequently left their job anyway within twelve months. In fact, a great many are gone within three to six months.

Hence, take it in your stride, thank your employer for the opportunity and reaffirm your intention to leave. Stand your ground. However, if you decide to stay, be on your toes. Don't be naïve. Just because you've accepted your counter offer doesn't mean your resignation has been forgotten. You are going to have to work extremely hard to win back your employer's trust. You'll probably find you have to strive harder than your colleagues to prove your loyalty and commitment to the company. Your new post-resignation life with your old company is not going to be easy.

Take an active part in your own career management. If your company is interested in your progression, you’ll know it before you decide to resign. Examine your initial reasons for wanting to make a change; often the reasons people make job changes are for issues other than money. If this is the case, then it is likely you will return to those same issues if you accept a counter offer, after the initial glow of more money and feeling appreciated by your current company wears off. On the other hand, if money, or not feeling appreciated as a result thereof, was the primary reason for making a change, the money they offer may only be your next raise pushed up by a few months.

In our example, the person in question burned bridges with not just his current employer, but with the Chairman of the other company as well, something which costed him dearly. In the end, after weighing all the factors and perhaps discussing them with family members, close friends or a mentor, you will need to make a decision. Ultimately, you need to do what is in your best long-term interest.