If you’ve never thought about leaving your job, then you’ve probably also never found yourself in the counteroffer scenario. In this situation, an employee has a separate opportunity – perhaps a new job or new employment status – that’s calling, and the current employer seizes the chance to get the employee to stay through said counteroffer. And as an employee, the Harvard Business Review quips, “You’re left with a question you thought you had already answered: Should you stay, or should you go?”
If you have thought about leaving your job or have even put a counteroffer on the table, we encourage you to take a look through this study. We spoke to over 1,000 people in the field today – both employees and hiring managers. Nearly all had some experience with counteroffers, and they certainly had a few things to say about them. The counteroffer content, motivations, pros and cons, and even subsequent trust issues between employees and the company were analyzed. Read on to see what we uncovered.
More than 67% of hiring managers had tried to get an employee to stay and extended a counteroffer at least once during their career. There was a clear trend between counteroffer extensions and company size: The smaller the company, the more likely HR reps were to counter. Small companies may rely more heavily on each team member and go to great lengths to retain top talent.
When we asked hiring managers what their most common reasons were for extending a counteroffer, 57.1% didn’t want to lose the talent, while 49.1% didn’t want to lose the employee’s knowledge of the job. The majority of hiring managers simply couldn’t spend the time or money: 67% believed it was costly to replace a talented employee, and 83% thought it was too time-consuming. But, their train of thought was valid: It costs, on average, a third of a person’s salary to find a replacement and can be quite the time suck, as well. Reasons such as time-sensitive work and the threat of competitor acquisition only pushed 10.8% and 12.3% of hiring managers to take action, respectively.
Receiving Counters Remotely
Remote employees weren’t as likely to get counteroffers: Only 35% of the hiring managers we spoke to had given them one (compared to the 57% of hiring managers extending them to employees overall). When we asked why, hirers were pretty divided. Nearly 32% said working remotely decreased workers’ chances of receiving a counteroffer, while 38.7% said it didn’t influence the decision at all. The remaining 29.7% said remote work actually increased a person’s chance of receiving a counteroffer. Although research reveals that remote employees can be more productive than in-office workers, this reputation has yet to be internalized by all hiring managers. Experts also float the idea that informal learning is forfeited by not being in the office or a collaborative setting.
Money talks, at least for most hiring managers. More than a third of managers countered with a 10% raise, 29.2% gave a 5% raise, and a determined 18.9% offered a 20% raise to employees they sought to retain. Additionally, nearly a third gave out more vacation time and/or a transition to a different role.
Many, but not most, felt employees were more productive after a counteroffer made them stay. After having their offer accepted, 43.9% perceived the employee as more satisfied with the job. These perceptions might be misguided, however, as only 22.6% could say it helped the employee stay at the company for an extended period.
Tenure and counteroffers tended to relate differently. Only a quarter of hiring managers were able to retain an employee who had previously attempted to leave for four or more years. Instead, three-quarters left within three years after accepting the counter. So, while money may work to retain an employee in the short-run of a company’s operation, the employee’s eventual departure (and consequential cost) is most likely a reality to be dealt with at some point in the company’s timeline.
Only 44.8% of hiring managers felt counteroffers weren’t a long-term solution. Perhaps this is more reflective of a smaller company’s long term being on a relatively shorter planning schedule than larger teams with over 250 employees. In other words, the six months to three years that some employees were likely to stay after accepting a counteroffer may be considered relatively long term in the life of a small business.
But, we also wanted to know how hiring managers really felt about the employees who decided to stay. Were they perturbed or off-put by the incident, or encouraged and relieved? While the majority felt extending and working through counteroffers was a viable solution, around 37% still believed it set a bad precedent. Likewise, just over a third stated counteroffers often result in trust issues with the employee on the receiving end. Despite these viewpoints, employees still rejected counteroffers 35% of the time.
Employed people found their point of view to be a little different from those of their hiring managers.
Only 85.5% said they had received a new job offer before – 54.1% said it was when they weren’t even looking for a job. While 37% claimed to have no intention of accepting the offer, 1 in 4 employees seeking a counter from their employer received one. An additional 28% of respondents were under the belief that attempting to get their employer to extend a counteroffer was pointless.
Time to Turn Down
Nearly half of counteroffers were turned down, but we wanted to know what it was that would have made them stay. Money? A promotion? Time off? Yes, yes, and yes. All of these incentives were enough to entice 57.8%, 31.2%, and 20.1% to reconsider their decision to leave, respectively.
These same desires for money and something new were echoed in employees’ next career moves. After rejecting a counteroffer, they often left for better salaries (74.8%), a better job overall (61.8%), and the desire to try something new (43.9%). Most felt they made the right choice by leaving as well – 81.6% were satisfied with their new job as a whole.
Not everybody jumped ship, however. A little more than half of respondents accepted the counteroffer they received – continue reading to see why many people chose to stay.
From Those Who Accepted
Counteroffers had a 55% acceptance rate, and this group often valued a level of job familiarity or comfortability enough to stay. Job security also influenced 56.3% of participants to stick with an employer after being countered. Friendships also helped tenure, encouraging 33.3% of employees to accept their employer’s counteroffer. Many “stayers,” however, associated some negative emotions with these counteroffers, expressing fear of change or uncertainty as a reason for accepting the money.
We further asked this group of employees who chose to stay with their employers what it would have taken for them to leave, even theoretically. Most would have wanted a substantial salary increase of 20%, but 22.8% would have done it for just a 10% raise. Even an improved work-life balance would have been enough for 34.1% of employees to accept a new job offer. Getting out of the office was more important for 28.1% of employees who said they would leave if they were offered more vacation time.
Receiving Your Worth
The research is pretty tough on accepting counteroffers. Employees across the country were quite divided in their reactions to receiving them and often wanted to do something new anyway. When they did accept counteroffers, most hiring reps weren’t able to say the employee was more productive or satisfied.
But even if you’re not actively planning to leave your job, it’s always nice to have options and potentially even some lucrative offers and counteroffers. If you would like to explore your options, start with LiveCareer.com. LiveCareer is a one-stop shop for professional expertise in everything from resumes to cover letters and career advice. Make a great resume with ease, and then rely on our guidance to help you through the rest of the application process. You never know what new offers (or counteroffers) you may receive!
Methodology and Limitations
For this study, we collected results from 1,161 people in the U.S. via Amazon Mechanical Turk. To qualify for this study, respondents were required to indicate full-time employment.
Of the employees surveyed, 48% were female, 51.7% were male, and 0.3% were nonbinary. Respondents ranged in age from 18 to 76 with an average of 37 and a standard deviation of 11. Likewise, of the hiring managers polled, 41.5% were female, 58% were male, and 0.5% were nonbinary. The average age of hiring managers was 36.
An attention-check question was used to identify and disqualify respondents who failed to read questions in their entirety. There are limitations with self-reported data, including, but not limited to, recency bias and exaggeration, especially when it comes to salary.
Fair Use Statement
Both employees and employers have a lot to think about when considering a counteroffer, and this data may certainly help them make more informed choices. That said, if you share the data, it must be for noncommercial purposes, and you must link back to this page to provide proper credit.