Hanover's guide to handling a counteroffer from your current employer

More and more people are switching careers. In fact, 56% of today’s workforce are actively looking for new jobs, according to Forbes, a 51% increase from 2022. But the decision to explore new opportunities leads to a common dilemma - the counteroffer.

When you’ve handed in your notice and mentally prepared for your next career chapter, your current employer can throw in a curveball, asking you to reconsider. 

Their offer might be tempting, whether it’s a salary increase or a promotion - but there are important factors you need to consider. By following the steps in this guide, you’ll be able to successfully navigate this critical juncture in your career and make the right choice for you. 

Counteroffer motives: Is your employer really enticing you to stay?

From your employer’s perspective, encouraging you to stay is a strategic move that mitigates the impact of losing a valuable employee. There are several reasons behind this:

1. Retaining talent is more cost-effective than onboarding new staff

2. Your departure may create operational gaps that are challenging to fill

3. They want to avoid a ripple effect where more staff feel empowered to leave

4. Your departure could trigger a drop in team morale and increase their workload

5. The persistent skills shortages means employers can’t afford to lose skilled staff

Hanover’s guide to navigating a counteroffer

It's essential to know how to accept a job offer or counterproposal strategically so it aligns with your long-term career goals. While understanding how to negotiate salary is a critical skill, money is the least important factor you should consider.

Step 1: Why did you resign in the first place?

Receiving a counteroffer can skew your decision-making in several ways. You may feel grateful and swayed by the familiarity of your current workplace or the promise of more pay.

But it’s important not to let your emotions affect your judgement. Take a step back and remember what caused you to resign in the first place. Reconnecting with your motivations allows you to gain clarity and align your decision with your long-term goals.

Step 2: Assess the value of each role

Assess what brings more value to your professional journey: your new job offer or staying with your current employer. Create a list of pros and cons, considering factors like:

• Financial benefits
• Responsibilities
• Growth opportunities
• Workplace culture
• Work/life balance

Also think about the potential outcome of each decision. Accepting a higher salary at your current workplace might mean more money, but it could also stunt your growth. Meanwhile, accepting the original offer of a new role could mean more potential for career advancement.

Step 3: Look at the history

Do your own research before accepting a counteroffer. By examining industry benchmarks, salary surveys and market trends, you’ll have a better understanding of whether a seemingly attractive proposal matches industry norms. Also examine how your company treated previous colleagues who accepted an offer to stay, being sure to pick up on any patterns.

Equally important is to look at the broader statistics. For example, research reveals that counterproposals are short-term solutions - 80% of employees leave their company only six months after accepting one.

A CIPD survey shows that 40% of employers counteroffer with higher pay - but negotiating salary isn’t the issue. Global research by Microsoft lists work/life balance and lack of flexibility as the top reasons why employees resigned in 2022. Why is this important? It shows that just because your employer offers more money, it doesn’t mean you’ll be any happier.

Step 4: Know the potential implications

Accepting your employer’s offer carries hidden risks that negatively impact your career in the long run. For example:

• Your employer will lose faith in you. Your decision to leave diminishes your loyalty, meaning you’ll be passed over for things like promotions
• Your career won’t progress. 50% of candidates who decided to stay in their existing role are back on the job market after two months
• Your colleagues could resent you for not being a team player. This compromises team dynamics and work culture 

Step 5: Negotiate until you know the deal is right 

Whether you’re accepting the new job or choosing to stay with your current employer, negotiate until you’re 100% happy. This involves understanding how to negotiate salary, responsibilities, flexible hours and any extra benefits.

You can even use your employer’s offer as a negotiation tool when navigating how to accept a job offer from a new company. Doing this reinforces the value you bring to the table and prompts them to reevaluate their proposal.

Approach this tactfully, focusing on the positive aspects of both opportunities rather than pitting the companies against each other. Skillful negotiation ensures your next role meets your expectations.

To stay, or to go: what’s the verdict? 

Declining your current employer’s counteroffer to stay can bring more benefits than drawbacks to your career. Exploring new opportunities adds variety to your career, leading to personal growth, new skill acquisition and a broader network.

Accepting is only a temporary solution. The underlying issues that prompted you to resign will likely persist, not to mention the limited career growth you’ll experience by staying in your comfort zone.

How can Hanover help you navigate your next career move?

Whether you choose to accept a counteroffer or seize a new opportunity is entirely up to you. We hope that by reading this guide, you understand how to make a decision that reflects what you want to gain from your professional journey. 

To learn more, explore Hanover’s range of articles on how to champion your next career move. If you’re among the 56% of people looking for a new role, Hanover will help you do it through our industry-leading services. To find out exactly how we can transform your career, contact us today.