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How to Deal with Counter Offers: Tips for Employers & Candidates

Here are a few tips on how to deal with counter offers – for both employers and candidates.  

by nudgegroup on August 18, 2021

Today’s recruitment market is hot! It’s explosive! We haven’t seen spikes in demand like these since the dot-com boom (Ok, I just gave away my age there).  

According to Business Insider, ABS data is saying “27% of businesses reported having difficulty finding suitable staff to fill jobs, and almost one in five said they did not have enough staff based on their current operations.” 

So, how does that make the recruitment market a “hot market”? 

Well, we’re seeing companies across all industries hire like never before. Candidates have more options to consider: work benefits are expanding, interview processes are shortening, contracts are being signed on the same day as final interviews are happening, and salaries are on the rise – an additional $10,000 – $20,000 for permanent employees and an extra $100 – $200 per day for contractors.  

It’s chaos!  

With all the recruitment activity happening, we’re seeing successful candidates resign from their current roles, and, here goes: the counter offer.  

Is the grass always greener on the other side? Here are a few tips on how to deal with counter offers – for both employers and candidates.  

For Employers 

As an employer, it’s all about addressing any issues your team might have, before they start looking around for another job. That means keeping an open dialogue with your staff, understanding their drivers, career ambitions, areas of concern and any professional development needed. 

Everyone is different, so be open minded when having your 1:1’s. 

If you’re able to take action on any of the issues your staff have, such as offering more flexibility or setting incentivised goals for them to achieve, that’s a great place to start, and a good opportunity to avoid turnover.  

In my opinion, by the time an employer makes a counter offer once an employee resigns, it’s too late. That team member has already checked out and are being dazzled by something new and shiny. Throwing more money or extra responsibility at them at the last minute doesn’t show you value them. Rather, it just says you don’t want to go through the hassle of replacing them.  

A band-aid solution won’t fix the deeper, underlying issues.   

For Candidates 

My number one piece of advice for candidates would be this: have a conversation with your manager before exploring the market. Talk to them about potential internal opportunities, extra training, pay raise or more flexibility.  

Have a clear idea of why you’re considering other employment options, or why you’re resigning – what made you look at other opportunities? If all those things are clear in your mind, then a counter offer probably won’t amount to much. It’s when these conversations have been had up front, that’s when things start to become unstuck.  

You’re given a counter offer, then what happens next?  

It’s exciting, confusing, maybe even a little flattering. The question is – should you stay or should you go? You’ll probably start to have doubts creep in, you might second guess your chances of success at the new role, you’ll wonder if change is really what you want, you’ll think about having to learn new processes and systems, the list goes on.  

This is when a counter offer can seem really attractive, and you be tempted to just take the “easy” option. A new title and pay raise sounds pretty good right?  

Just be cautious with taking this route. Ask yourself – does a new title or more money really change why you were leaving in the first place? Has the salary increase been approved?  Is there a role description for the new position? Has there been a clear training schedule set for you to succeed? When will this new position and money take effect?   

You need to think about all these things, then weigh up your options and go with what feels right for you.  

The bottom line:  

Employers, the thing to remember is you don’t ever want to get to that counter offer stage. Keep an open communication line with your team members and make sure they’re getting what they want out of the role. 

Candidates, getting a counter offer can seem like a great sign from a company, but you need to ask yourself: does the counter offer really address the original issues you have, or is it just a frantic band-aid solution to avoid replacing you? 

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