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Counter-offers – when, if ever, should they be considered

Article Background
“At Pro-Tax this year we have seen a 20% increase in counteroffers, with 80% of candidates coming back to us within 6- 12 months of accepting, as nothing fundamental had changed"

Many of you will have heard that 2022 has been titled “the great resignation”, but some recruiters may call it “the year of the counter-offers”! The Tax market has always been an extremely candidate short market but in 2022 we have seen more job openings than usual. With a lack of ‘available’ candidates, employers recognise the increasingly difficult task of recruiting new talent in today’s candidate-driven market. It is easier for them to maintain their current employees by offering a quick fix than it is to replace them – hence the increase in counter-offers. In this article, I want to address the positives and negatives of counter-offers, which are the good ones, and which are the knee jerk reactions purely to save cost and time. It is also important to educate my clients in this current marketplace and I will therefore be highlighting the potential problems for an employer when issuing a counter-offer to an employee. Most candidates that we act for are subject to a counter-offer when they come to resign. Each counter-offer we see plays on different wants or needs of an individual; more money, reduced hours, promotion and flexible working arrangements. Unfortunately, it is far too common that we see individuals accept the counter-offer, are happy for a short time, but are soon back in touch as fundamentally, nothing has changed, it was simply a quick fix.

Here are some statistics to have a think about: 1. 80% of candidates who accept a counter-offer from their current employer ends up leaving within 6 months. 2. 90% of candidates who accept a counter-offer leave their current employer within the twelfth month mark 3. 50% of candidates that resign will be counter-offered by their current employer For me this is one of the most interesting statistics. Why?... well, most candidates will feel valued when they receive a counter-offer but in truth, it is more often both time and financially beneficial to the employer, removing the hassle of finding a replacement.

When should you start to think about counter-offers? Before you look for another job! The moment you are not happy with location, salary, job responsibilities, reporting lines, staff etc. This is the moment that you should be speaking to your employer and having an open conversation about things that can be fixed. Ultimately this will save you, us and any potential employer a lot of time. The last thing you want is when you are 8 weeks down the line for them to tell you they can change the one thing that you are not happy with. Think seriously about your reasons for leaving the business. Be open with your manager and make sure you have explored all your options internally before you come to market.

When is it a good counter-offer? Never. If you have done the above and spoken to your current employer, you should never get to this stage. If you are valued then they will change what needs to be changed before you resign. It is also worth noting that once you have resigned, you have demonstrated your lack of loyalty to your employer – which you can never take back.

When is it a bad counter-offer? Once you have resigned! If you receive an offer from your current employer due to you resigning, then it is too late. Often a counter-offer is a better time/cost saving exercise over and above replacing you. Your resignation is a complete frustration to your current employer. Ultimately, they want to provide you with what you need so that you return to work and continue with your role as normal. To replace you, your employer will have to factor in the below costs. - An increase in salary for the new incumbent - A recruitment fee - The cost of no one in the position - The cost of training someone new

Ask yourself the following questions… - Would you have received your salary increase/promotion if you hadn’t handed your notice in? - How will this discussion of you handing in your notice affect the relationship with your boss? - How will that affect your future salary, bonus and promotion prospects long-term? - Does the offer get rid of your original reasons for wanting to move? - What about the great job/s that you have been offered, will you be missing out on a great career move? Handing your notice in can be an emotional thing to do. You went through so much to get to the stage of getting an offer, you were proactive to change things that you could control. You saw things at your current firm as deal-breakers that couldn’t be fixed, so you found a role better suited to your long-term plan. Don’t let emotions, flattery, or extra cash affect your judgement. Stay strong and set on your decision, tell your current boss that you politely decline the counter-offer and start the countdown of starting your new job!

Are counter-offers a good long-term strategy for employers? It is important that employers do not use the counter-offer strategy for every employee. This can create unstable pay equity within the firm while not addressing the underlying issues. Taking into consideration the statistics mentioned earlier on in this article, it is clear that providing a counter-offer is only delaying the inevitable. The other issue that is worth considering is the possibility that other team members will hear about a colleague receiving a counter-offer. This could cause tension and frustration across the team and result in other employees asking for counter-offers or leaving the firm. There are plenty of other factors to consider when considering offering a counter-offer to an employee but ask yourself: is this just a short-term solution for this individual?

At Pro-Tax, we can help support you every step of the journey – both candidate and client - so to learn more about the topic discussed, or for any other advice, please feel free to reach out to me, Maisie Horrell at or 07855 746 366.