How To Handle A Counteroffer

Woman holding ready to sign counteroffer and pen

Maybe a counteroffer is what you’ve been hoping for all along and you’re thrilled to have the option on the table. Maybe it came out of left field and now you’re stumped on how to proceed. Regardless of how your counteroffer came about, you’re faced with a major decision: take it or leave it? And what will either option mean for your career?

We’ll cover everything you need to know about how to handle a counteroffer: what it is, how to get one, when you should accept versus decline, and some sample counteroffer responses.

What Is A Counteroffer?

When you’ve landed a new job and give your current employer notice that you plan to leave, they may offer you more money, more responsibility, a higher job title, or some other incentive to get you to stay. This is known as a counteroffer. 

It’s much more cost-effective to retain a good employee than to find and hire a new one, so it’s in a business’s best interest to hold onto its top talent. Counteroffers are a standard part of corporate life, especially for companies in competitive fields like tech.  

Receiving a counteroffer is a nice option. It means your company wants to keep you and is willing to put their money where their mouth is, so to speak, to do so. Depending on your situation, it might be less stressful to stay in a job and location you’re familiar with instead of learning a new one, potentially relocating, etc. 

Unfortunately, there are a lot of downsides to consider when it comes to counteroffers. Accepting a counteroffer can have negative implications for your career since you’ve made it known to your higher-ups that you were looking to leave. Regardless of your motivations, you risk creating the appearance that you have one foot out the door or that money is the only thing keeping you at your job. 

In a Harvard Business Review survey, nearly 40% of executives said accepting a counteroffer will negatively impact a person’s career, while 80% said negative consequences could include diminished trust and a compromised reputation. 

So when should you consider accepting a counteroffer? We’ll get to that in a minute, but first, let’s talk about how to go about getting a counteroffer to consider in the first place. 

How Do You Ask For A Counteroffer?

Asking for a counteroffer is a delicate conversation. After all, it reveals that you’ve been interviewing elsewhere, which may feel like a betrayal of your company’s trust. It can be awkward and nerve-wracking. 

Remember, though, that it’s up to you first and foremost to manage your career. Not even the greatest employer on the planet is going to put one employee’s needs above those of the organization when it comes to making decisions. So, you’ve got to do what’s right for you and your future.  

Related: How to Negotiate a Job Offer

Follow these steps to tell your employer you have another offer and ask them for a counter offer. 

Assess the situation

First, decide whether a counter offer is even realistic. If your company just announced a round of layoffs and they’re cutting budgets left and right, asking for more money is going to come off as incredibly misguided. You also don’t want to barge into your boss’ office and blurt out that if they don’t give you X, Y, and Z, you’ve leaving. If you’re serious about the possibility of staying, consider what it would take and how realistic it is for your company to provide what you’re looking for. 

Be straightforward

The best place to begin is by asking for what you want, without bringing up your outside offer. If it’s more money you’re looking for, make the case for what you deserve based on your market research. If it’s more responsibility, show how your track record demonstrates that you can handle it. You may be able to get what you want without ever having to reveal that you were considering leaving. 

Use the offer as leverage if needed

If you’ve had an up-front conversation with your boss and you’re still getting a non-committal answer or they’re pushing to revisit the conversation at a later date, then it’s time to lay your cards on the table. Let them know that you’ve received an offer that meets your needs and you’re considering taking it. Don’t let the tone turn heated or emotional–this is a business conversation. Instead, be frank about where you stand and give them a date for when you plan to make a decision. 

Be prepared to walk

The big consideration with asking for a counteroffer is that you must be prepared to follow through on leaving if you don’t receive one. Once you reveal the fact that you’ve been looking elsewhere, some employers will unilaterally decide that it’s time for you to go. So, if the decision date you selected comes and goes without a peep from your employer, be ready to walk away.

Related: How to Resign 

Why Should You Accept A Counteroffer?

Accepting a counteroffer isn’t always a bad choice. Here are some situations where it might make sense to accept one. 

If it’s truly about money

If you’re generally happy with your job but your arguments for a raise have fallen on deaf ears, leveraging a counter offer may be the way to show your employer that you’re serious about leaving. However, be wary of how this will affect your reputation. Also, consider whether there’s truly a future for you at a company that refuses to pay you what you’re worth unless you threaten to leave. 

If they show that they’re willing to make meaningful change

If it’s a change to your role, a shift in responsibilities, or more leadership opportunities you’re looking for, your employer may very well be able to accommodate your requests. This is why having an honest conversation with your boss is so important. It will help you assess whether your employer is genuinely committed to making the change you’re after so you can factor that into your decision. 

Why Should You Reject A Counteroffer?

Rejecting a counteroffer is probably the right choice if one of these statements is true. 

You have significant reasons for leaving

The fact is that most people don’t leave their jobs based on money alone. More often it’s a problem with leadership, overwork, lack of advancement opportunities, poor work environment, or some combination of all of these. A larger paycheck isn’t going to make any of these things go away, and accepting a counteroffer is probably just delaying your inevitable departure. 

It could affect the way you’re treated

Even if an employer makes a counteroffer in good faith, managers are only human and their knowledge that you were looking to leave is likely to color their interactions with you. They might not feel fully confident trusting you with sensitive information or giving you the lead on projects, which is probably the exact opposite of what you were hoping to achieve. 

It could damage your professional reputation 

It’s not only your current employer you have to worry about–remember that there’s another company involved, as well. If you make it to the point of getting an offer from them (and possibly accepting it) and then go back on it, you’ll burn a bridge with that employer for good. If word gets around, it could hurt your wider chances of getting a job in your field in the future. 

Sample Responses To A Counteroffer

Accepting the offer

Dear [NAME],

Thank you for your willingness to have a candid conversation regarding my future with [COMPANY]. I have decided to accept the terms you proposed in our conversation on [DATE]. 

To summarize, these include:

  • An increase of my salary from [CURRENT SALARY] to [NEW SALARY]
  • A change in my title from [CURRENT TITLE] to [NEW TITLE]
  • Added responsibilities including [LIST RESPONSIBILITIES]

I’m pleased to remain on the [COMPANY] team and look forward to the opportunities ahead. 

Best,

[YOUR NAME]

Rejecting the offer

Dear [NAME],

Thank you for listening to my requests and proposing an offer to meet them. After careful consideration, I have decided to move forward with the opportunity I received from [OTHER COMPANY], which I feel is the right choice for my career at this time.

I wish you the best moving forward. 

Sincerely, 

[YOUR NAME]


Resources and sources

  1. https://hbr.org/2019/01/if-youre-about-to-take-a-new-job-should-you-consider-your-bosss-counteroffer

About Pete Newsome

Pete Newsome is the president of 4 Corner Resources, the nationally acclaimed staffing and recruiting firm he founded in 2005. His mission back then was the same as it is today: to do business in a personal way, while building an organization with boundless opportunities for ingenuity and advancement. When not managing 4 Corner’s growth or spending time with his family of six, you can find Pete sharing his sales and business expertise though public speaking, writing, and as the host of the Hire Calling podcast.