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It is always great to hear the excitement in my candidate’s voice when I call them up to let them know that they’ve received a job offer. However, I’ve also experienced instances where candidates call me a few days later stating that they have received a counteroffer from their current employer. Such an instance is not ideal. This brings along the most common follow-up question – Should they play it safe and accept the offer or can they actually ask for more?  

What is a counteroffer?

A counteroffer can be an offer made by your current employer in terms of a better salary package or career prospects. It can also be a better offer made by your prospective employer should one reject the initial offer. According to a survey conducted by CareerBuilder survey:

  • 56% of candidates do not negotiate for higher pay when they are offered a job;
  • 51% of candidates are uncomfortable asking for more money; and
  • 47% of candidates are concerned employers will decide not to hire them if they ask.

Glassdoor survey further indicated that women are more risk averse when it comes to discussing counteroffers with 68% of women stating they prefer not to negotiate compensation. In comparison, 52% of men chose not to engage in counteroffers.

Is accepting a counteroffer from your current employer always a positive?

I always advise my candidates on their priorities and try to fully understand their motivations before I put them forward for a role. On a few occasions, I’ve had candidates who accepted an offer and called me back after a few days to let me know that they have accepted a counteroffer from their current employer. While a higher pay can be an enticing factor, based on my experience – it is only a temporary fix. In fact, research conducted by software company Eclipse, have indicated that:

  • About 80% of candidates who accept a counteroffer from their current employer end up leaving within 6 months;
  • 9 out of 10 candidates who accept a counteroffer will leave their employer within 12 months; and
  • 50% of candidates that accept a counteroffer from their current employer will be back on the job market after two months – usually when the novelty of an increased salary and new responsibilities wear off.

Furthermore, accepting a counteroffer from your current employer can also subsequently be a sensitive subject as you’ve demonstrated your lack of loyalty towards your organisation. There is also a strong likelihood that your basic reasons for wanting to leave the organisation to begin with, will eventually resurface. If you accepted your current employer’s counteroffer for a higher salary, it may also be worth finding out if the counteroffer is coming out of your next raise and is instead being granted early. If this is the case, you can ask yourself whether this will affect your salary review and if this counter-offer is “locking” you in terms of future raises. 

How to negotiate a counteroffer?

If you have applied for a new role and received an offer that is below what you expected, you can either:

  • Ask if there is any flexibility in salary – this could be either immediate or in the future, for example once you hit your targets;
  • Enquire about any possible fringe benefits such as children’s school fees reimbursement, car lease arrangements, health and wellness expenses that can be provided in the absence of an increase in salary; or
  • Turn down the offer as the company may not make a counteroffer.

Tips to keep in mind before entering a counteroffer discussion with a prospective employer

  • Research on your position, compare with similar salary reviews and the average market rate. When asking for a higher salary, you need to substantiate your claims in order to be compensated accordingly.
  • Remind the employer why you are the best candidate for the role. Prepare a business case justifying why you should receive a better offer. If you can show your value-add to your future employer and quantify it in the form of increased revenue, you will have a higher probability of landing a better pay.
  • Think about your priorities and know what is important to you – do you think you deserve a higher pay for the work that you do?
  • Learn about the new company and your role such as your responsibilities, location, travel, flexibility in work hours, opportunities for growth and promotion, perks and training programs.
  • Submit all your counteroffer requests at one go rather than sending them in separately.
  • Send the employer a thank you note for the job offer.

Contact us

While counteroffers can be quite subjective and dependent on other factors such as the employer’s willingness and financial capacity to offer more, it is also good to note that sometimes you will only receive something if you ask for it. At Progressive Recruitment, we can help facilitate this conversation between you and your future employer. If you are a candidate within the technology space and are looking for your next role, feel free to contact us on 02 9285 1000 for a confidential discussion or visit our Linkedin page to learn more about the roles we specialise in.