Imagine this: after months of interviewing, assessing, and carefully selecting the ideal candidate, you’re finally ready to extend an offer. You’re confident they’ll be a fantastic addition to your team, and you can’t wait to bring them on board.
But then, the unexpected happens. The candidate contacts you to say they’ve received a counter-offer from their current employer. Maybe it’s a higher salary, a new title, or enticing perks and benefits. Whatever it is, it’s making them rethink their decision to leave.
Don’t panic—our complete guide will walk you through what to do in this situation. Read on to learn how to navigate this tricky scenario.
first, should you consider increasing your offer?
If you’re faced with this situation, the first question that comes to mind is likely, ‘How can we make our offer more appealing?’
If your budget allows, it’s reasonable to respond to the counter-offer with a higher offer of your own.
However, this isn’t always an option—and that doesn’t mean the opportunity is lost. Remember, salary is just one of many factors employees consider when leaving a job, and it’s often not the top priority.
Even if you can’t raise your offer, you might still persuade the candidate that your organization is the better long-term choice.
is it ever a good idea for candidates to accept a counter-offer?
There’s an old saying in recruitment that candidates should never accept a counter-offer. The reasoning is that if a company is offering more money or benefits now, they likely didn’t value you enough in the first place.
While there’s some truth to this, it’s not always the case that accepting a counter-offer is a mistake. If the primary reason you were looking for a new job was a need for higher pay, staying where you are might make sense if that’s what’s offered.
However, for most employees, money isn’t the only reason they want to move on. Candidates should carefully consider whether the counter-offer truly addresses the underlying issues before accepting.
things to avoid when your candidate receives a counter-offer
Before we dive into the best way to handle this situation, let’s quickly go over three things you should never do:
Threaten the candidate: For example, saying, 'This is your only chance to work here. It’s now or never, and if you make the wrong choice, you’ll regret it.'
Make the candidate feel guilty: For example, saying, 'I can’t believe you’re considering this after all the effort we put into the recruitment process. We thought you really wanted to join us, but now you’ve wasted our time.'
Patronize the candidate: For example, saying, 'Everyone knows you should never accept a counter-offer. You must be crazy if you're really thinking about it.'
how to approach the situation instead
If your candidate is considering a counter-offer from their current employer, here are some steps you can take to handle the situation effectively:
be proactive and assess early
A candidate receiving a counter-offer is common, as many companies want to avoid the cost of replacing an employee. To prepare, try to gauge the likelihood of this happening early in the recruitment process. Ask your candidate about their reasons for wanting to leave their current job, so you can understand their motivations. This will also show the candidate that you're genuinely interested in their long-term goals. You can even ask them directly during the interview stage how they might respond to a counter-offer. While they may not be completely open at this point, it can give you some insight into the risk involved.
don’t take it personally
It’s natural to feel disappointed when a candidate you’ve invested time and resources in is now considering staying with their current employer. However, remember that the candidate is making an important decision that will impact their future. Instead of taking it personally, congratulate them on their offer and schedule a conversation to discuss their reasons and the details of the counter-offer.
remind the candidate why they wanted to leave
During your discussion, bring the conversation back to the reasons the candidate wanted to leave their current job in the first place. If money is the only factor, there’s a high chance they may accept the counter-offer, as they’re already comfortable with their current role. However, if there were other reasons, ask thoughtful questions like:
What opportunities will you have for growth if you stay?
Do you believe the issues you had with the company will be addressed?
Will staying help you progress in your career, or are you plateauing?
Will the pay increase solve the underlying issues that made you consider leaving?
This can help them recognize that money alone may not solve the deeper reasons they were considering a move.
discuss what the counter-offer really means
It’s important to approach the counter-offer discussion gently, avoiding criticism of their current employer. Instead, ask questions like:
Why do you think your employer is offering this now?
What will this new role/promotion really mean for your day-to-day work?
Will this pay increase affect your eligibility for future raises?
This will help the candidate evaluate whether the counter-offer addresses their long-term needs.
share your compensation philosophy
While a higher salary might be appealing, remind the candidate that this is often a short-term solution. Focus on your organization’s compensation philosophy and long-term benefits. For example, you might mention annual salary reviews or opportunities for career progression, helping them see that your offer could provide more value in the future.
give them time to think
Don’t pressure your candidate into making a quick decision. After your conversation, allow them time to reflect on what’s been discussed. Follow up at the agreed time to check if they’ve made a decision. If they accept your offer, you’ve successfully countered the counter-offer. If they choose to stay, you’ll know you did everything you could, and you’ll gain valuable insights for future recruiting.
making employee retention a priority
Now, what if you're on the other side of the table and a current employee wants to leave? Should you make a counter-offer? While it may seem like an immediate fix, studies show that 50% of employees who accept a counter-offer are actively looking for a new job within 60 days.
Instead of waiting for a crisis, focus on building a culture of retention. By continuously addressing employee needs and offering growth opportunities, you’ll reduce the risk of losing your top talent to counter-offers in the first place.