How to Handle Counter Offers

How to Handle Counter Offers – And Why Rejecting is Often Best

Counter offers are one of the trickiest aspects of the recruitment process. They can pop up out of the blue or you may be expecting your current employer to try to convince you to stay. Counter offers usually come in when you’re handing in your notice after receiving an offer from another employer.

This offer is designed to rival the one you have received from the other company to convince you to stay. Before you start looking for new career opportunities, it’s worth considering how to handle counter offers. Rejecting these counter offers is often the best path forward.

At FD Capital, we work with hundreds of financial executives to connect them with companies in the UK and beyond on a part-time, full-time, and remote basis. Our traditional recruitment and headhunting services are used by start-ups, scaling companies, and FTSE 500 organisations expanding their teams.

We’re breaking down everything you should know when navigating counter offers and how to decide whether rejecting an offer is the best option.

What is a Counter Offer?

A counter offer is an employment offer made by your current employer to attempt to convince you to remain at the company, instead of handing in your notice. This counter offer will attempt to rival the employment offer you have received from a prospective employer. You may receive two similar offers or have different perks from each contract.

Deciding to look for opportunities outside your current company is never easy. A counter offer is designed to tempt you to stay with your employer. Counter offers will typically have more favourable terms than your existing contract, usually including a salary increase, additional company benefits, or a promotion.

A counter offer may be appealing, but there are a few things you want to consider. Can you negotiate your counter offer? Why are you only receiving these additional benefits after handing in your notice? You’ll want to take some time to consider your counter offer fully

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Why Counter Offers are On the Rise

We’re seeing a sharp increase in the number of candidates receiving counter offers from their current employer. These counter offers are becoming more frequent as the talent pool decreases, recruitment becomes more competitive, and remote work has increased the expectations of employees for flexibility.

Recruitment is time-consuming and expensive. Companies often invest their time and money into their employee’s professional development. A counteroffer is often a company’s way of saving money in the long run by retaining existing talent.


Why Do Companies Make Counter Offers?

Companies make counter offers as it’s more financially viable for them to pay an existing employee more than to recruit and train a replacement. This consideration is particularly true in specialist roles or where the employee has received extensive professional development or training.

Training new employees, along with recruiting them, is expensive and time-consuming. Sectors with a skills shortage are increasingly likely to provide a counter offer when an employee submits their notice period. While a counter offer may seem flattering at first, it’s often made as a cost-saving measure.

Counter offers are a less disruptive way for companies to retain their talent and often avoid having to make changes to any specific problems within the company. A pay rise may enough to convince some candidates to remain at their current company – without considering their original reasons for looking elsewhere.

What Should You Do When You Receive a Counter Offer?

The first step to handling a counter offer is to consider your employer’s motives. Why are they suddenly offering you a more favourable contract to prevent you from leaving? Will the short-term fix of higher pay or a new job title be enough to counteract the reasons you wanted to leave?

A counter offer is your current employer’s final attempt to get you to stay on board. It’s why you’ll usually receive a counter offer after putting in your notice period. A counter offer can help the company save face, retain its top talent, and avoid the cost and time of recruiting a replacement.

Why You Should Reject a Counter Offer

Rejecting a counter offer is the best move in most scenarios. You’ll want to determine your company’s motive in giving you a counter offer and the impact of handing in your notice on your relationship with management. A counter offer may be an attempt for your company to buy itself time and handing in your notice may be seen as disloyal to your company, negatively impacting your reputation.

Making it clear that you were intending to leave could put you at risk of being made redundant further down the road if you accept your counter offer. Your increased salary or new job title may not be viable long-term if your company is a start-up or still scaling. Declining the counter offer may be a better move for your career long-term.

What Happens if I Accept a Counter Offer?

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We always recommend that our candidates take a little time to consider their options when they receive a counter offer. While you might be drawn in by the idea of a higher salary, research shows that accepting your current employer’s counter offer rarely works out in the long run.

Research by Eclipse shows that 80% of those who accept a counter offer leave the company within 6 months, jumping to 90% within 12 months. 50% of candidates who accept the counter offer will start looking for other opportunities within two months.

Your company offering you a counter offer will rarely address the reasons why you wanted to leave the company in the first place. Senior management may now see you as being disloyal and unlikely to remain with the company long-term. It’s worth considering whether a salary increase through the counter offer is simply the company offering to give you your next pay rise or bonus early.

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What to Consider When You Receive a Counter Offer

More companies are issuing counter offers to retain their talent and avoid the costly process of finding a replacement. Before you hand in your notice, it’s worth considering the possibility of a counter offer.

Here are a few things you should ask yourself when deciding how to handle counter offers:

  1. Why did you decide to leave your company?

The reason most people will reject a counter offer is because it fails to address the reasons why they wanted to leave the company in the first place. A salary increase or promotion won’t address a poor working system or lack of management support.

  1. Why did you not receive this counter offer earlier?

A counter offer is your company’s last attempt to get you to stay – but if they valued your work, why is this better offer only coming now? Shouldn’t your employer have offered you a pay rise and promotion earlier? Counter offers are usually motivated by a desire to avoid recruiting a new candidate, rather than because the company values the individual.

  1. How will accepting the counter offer advance your career?

One reason why may be leaving your company is for career progression. While the counter offer may offer a short-term gain, how will it advance your career in the long term? You’ll want to consider where your company is going in the future. A start-up or scaling company may have limited opportunities, whereas another company could offer a clearer path for long-term progression. Compare both jobs to determine which one has the best potential for your career development.

What to Do When You Receive a Counter Offer

You want to handle your counter offer in a way that allows you to leave your company on good terms to avoid negatively impacting your professional reputation. Rejecting a counter offer is almost always the best option for your long-term career progression. Your reasons for leaving your company and looking for opportunities elsewhere should be the driving force behind rejecting any counter offer.

You may decide to try to negotiate your counter offer, especially if your decision to leave the company was solely due to your salary. Ask about flexibility with your salary, whether it’s an immediate increase or with KPIs attached.

There are additional benefits outside of a salary increase that you could negotiate for in your counter offer. A car lease arrangement, health insurance, and paid-for training programs are possible options to negotiate with your counter offer.

One of the first things you should do is research your current position. Determine what the average market rate is and use websites like Glassdoor to compare your salary and other benefits. If you want to negotiate your counter offer, showcase how you add value creation to your organisation. You’ll need to make a business case for increasing the counter offer.

Don’t forget to compare all this with the other company you have received an employment offer from. Factors like travel, flexibility, and growth opportunities could make a higher salary in the counter offer look less competitive in the grand scheme of things.

When Should I Accept a Counter Offer?

You might weigh up your options and decide the best course is to accept your counter offer. Take time to weigh up the pros and cons, not forgetting to consider the reasons why you were looking for opportunities elsewhere.

The first thing you should do after deciding to accept is contact your recruitment consultant. They’ll share information on the best way forward and help you navigate handling your counter offer.

If you don’t have a recruitment consultant, contact the hiring manager directly and be polite but honest about accepting your company’s counter offer. You may be able to negotiate the offer from the other company to bring it in line with the counter offer.

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How to Reject a Counter Offer

The best way to handle counter offers is usually to reject them. Evidence shows that 90% of candidates who accept counter offers will leave their company within 12 months. If you have decided to reject your counter offer, you want to navigate the situation as professionally as possible to prevent burning any bridges.

The first step is to inform your current employer that you’re sticking to your notice period and rejecting the counter offer. It’s best to inform your company management in person, while also informing them by email to officially notify them.

Provide your reasoning for leaving and be confident in your decision. You want to leave your current employer with a positive relationship without negatively impacting your professional reputation.

You can use our template below when informing your current employer that you’re rejecting their counter offer.

Dear [name]

Thank you for your recent offer. I am writing to inform you of my decision to decline your counter offer. [you may decide to add your reasoning here]. I am grateful for my time and experience working as part of your team at [company name]. Notably, I am proud of [mention achievements or projects you worked on].

Please accept this email as notice of my official resignation as [job role], effective from [date].


[your name]

After rejecting your counter offer, get in touch with your recruitment consultant to confirm that you’re accepting the other offer. Explain to your consultant or the hiring manager why you’re accepting the position and let them know that you’ve handed in your notice period. Be proactive and show a willingness to hit the ground running in your new position. You want to start laying the groundwork for a successful partnership with your new employers.

Develop Your Career with FD Capital

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Our dedicated team of recruiters and headhunters will work with you to identify opportunities for full-time, part-time, and remote positions in the UK and beyond.

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