Should I accept an offer from my current employer?
Common scenario: You decide to leave your job, you undertake a rigorous job search, after many rounds of interviews you receive an offer at a great new company, you accept it and submit your resignation ready to start with your new employer! But suddenly there is a wrinkle – your employer who you thought didn’t care about you, your career prospects, or your compensation – is dismayed at the prospect of losing you and comes back with an unbelievable counteroffer for you to stay put and renege on your acceptance of the new job.
What do you do in this scenario? Receiving a counteroffer from your current employer can be jarring, unexpected, tempting, affirmation of your worth - perhaps all the above and throw all your plans into disarray.
At first glance, accepting the counteroffer might seem like the less risky option. Your employer is a known quantity, the new company is not. But staying put carries risks as well, in fact every article on the web cautions about accepting counteroffers. However, most of these articles are written by recruiting agencies who obviously have a strong financial incentive in you not taking the counteroffer! This article provides an unbiased framework to evaluate a tempting counteroffer.
Is it a fix?
If you have gone so far as to accept a new job offer, something must be off with your current employment. A counteroffer may or may not fix that. If your concerns were primarily compensation based, then a counteroffer might address them. A counteroffer is less likely to address concerns of the following types:
- Relationship with your manager
- Nature of the work
- Mission of the company
- Company culture
- Interaction with your colleagues
- Company policies
It is impossible for the company, the people, and the culture to change. What you need to decide is whether enough of the structural issues have changed and whether those are committed in writing (promotion, change of responsibility, change of team) or are simply oral promises (we will increase scope of responsibilities later).
Rocket tip: If you had started interviewing on a lark, out of curiosity, on the exhortation of a recruiter, or just to understand your market value –then by all means think about the counteroffer seriously. On the other hand, if your job search originated due to dissatisfaction with your current company, then you should be more skeptical of the counteroffer.
Long term compensation
Even if a counteroffer fixes compensation in the short term, you should think carefully through the implications on your long-term compensation. Your inferior compensation before the counteroffer implies one of a few things about your company:
- The company values your contributions fundamentally different than how you (and the broader market) value the contributions. Even if they fix the issue one time because they are in a bind, the issue will crop up again and again and they may not be “willing to play ball” the next time.
- The company does not have a robust organic process for re-evaluating compensation as people’s seniority and contributions increase over time. In the future, you may have to press the issue by threatening to leave or accepting an offer to force an adjustment.
- Lastly, the company does not have the capacity to pay at the same level as competitors or other industries where your skill set is in demand. This is a structural issue and likely to exacerbate over time. For example, if you are a software engineer, then very few companies outside Silicon Valley can compete for your services.
It is also important to ensure that your current counter-offer raise is not being borrowed from future raises or from professional development budgets for you such as coaching, education, conferences, training, or sponsorship for professional certifications.
Rocket tip: Talk candidly with 3-4 folks in your current company who took a counter offer a few years back. How did that turn out for them? Did the counteroffer provide only a onetime fix, or did it fundamentally change how the company viewed their contributions and allow them to thrive at the company?
Future employability in the industry
One of the more obvious risks is the extremely negative impact on your reputation with the new company you just agreed to join if you accept the counteroffer from your current employer. By doing so, you are essentially breaking an agreement with the new employer – regardless of whether it is a formal signed offer letter or just a verbal acceptance.
Your prospective new employer, who invested in recruiting you and crafting an appropriate and compelling offer, must now shift gears to resuming their search, possibly after missing out on other potential candidates who may no longer be in the market. It is no surprise that they will be disappointed and bitter! How does this impact you?
- You may never be able to work for the new company for the rest of your career. Many companies keep track of reneging of offers in their applicant tracking systems. Be prepared for this outcome.
- The executives, hiring managers, and recruiters are unlikely to hire you again– even if they move to a different company in the future.
- Lastly, if you had gone through a 3rd party recruiter or agency, they may also mark your behavior in their systems restricting your ability to engage with them in the future.
Rocket tip: Reneging on an offer has higher consequences for senior candidates as well as for candidates working in industries with just a few companies. Do some research into your industry and talk to a few folks who have been in the same situation as yourself to determine the impact of reneging on your offer.
Career progression at current company
A bit less obvious is the impact on your reputation and relationships at your current employer after accepting their counteroffer. On the surface, you might assume that they’ll be happy you aren’t leaving. After all, they wouldn’t have taken the time to craft a head-turning offer if they didn’t want you to stay.
But you’ve just demonstrated by your actions that you are not particularly committed to staying long term. They may also find it disconcerting that you didn’t raise your concerns with them first before interviewing and accepting an offer elsewhere. How might this impact you:
- Even if you are critical to the org today, your manager is likely to aggressively craft contingency plans in case you were to leave in the future. Over time, this will erode your negotiating position and indispensability.
- You might also be less likely to be staffed on critical projects that might suffer if a team member were to leave the organization midway through the project. Your employer might also become less forthcoming in revealing confidential information to you. Such reticence will inevitably impact your career progression over time.
Rocket tip: As uncomfortable as it may seem, discuss your concerns with your boss and HR. Ask for your counter-offer to include guaranteed severance to ensure that the company isn’t following a Machiavellian strategy and giving you a counter-offer to only keep you around until you can be replaced.
Relationship with mentors and champions
Furthermore, consider your employer’s willingness to invest in you and your career development. In many firms, one of the most critical relationships in your development is the relationship you build with mentors within the organization. A good mentor can supercharge your career advancement and development in many ways, but the relationship requires a significant time investment by the mentor, who is giving of their time and efforts. A mentor is less likely to invest themselves in a mentee who appears to have a foot out the door.
In addition to mentors, successful professionals need champions within their organization. These are well-respected individuals within the company who will push for your interests, fight for your promotions expending their own political capital in the process. Champions are putting their own reputations and goodwill on the line for you. They will be less likely to do so if your commitment is in question.
Rocket tip: Give your mentors and champions a chance to fix the underlying issues at your current company before starting the job search. If your concerns have merit, there is a good chance they will be able to address them. And even if they can’t solve them, they won’t feel shocked or betrayed when you decide to leave and you will be to retain them as mentors and champions for the rest of your career.
Self-confidence & judgment
One more relationship to consider, which is often not discussed enough, is the relationship you have with your own personal integrity. Beyond how others may react to your moves, perhaps the most important implication of accepting an offer only to accept your current company’s counteroffer is the impact on your ability to navigate your career and make decisions confidently.
We all want to be seen as people of our word to others, but it’s even more important that we trust ourselves. We must be able to trust our own judgment and decisions. If we have trouble keeping our word to ourselves, we will have trouble projecting our will into the future. Breaking our word impacts our confidence. Once you’ve made the decision to move on, your bias should be to trust your judgment.
Rocket tip: There is no easy way to predict how you will feel down the line. One way to analyze it is to reverse the situation and imagine you were hiring someone for your team who had accepted the offer and then reneged. How would that behavior make you feel? If you would have seen it as a violation of norms, then you might want to be more careful with taking the counteroffer as that is how your inner psyche will perceive it as well. If you would have seen it as part of the rough and tumble of business and what employees need to do to succeed in a world stacked against them, then this may not be an issue for you.
Conclusion
Ultimately whether to accept a counteroffer or not is a deeply personal decision and the merit of doing so will depend on your exact situation. Here are some facts as a parting thought:
- ~50% of top tier candidates that resign receive a counteroffer
- ~57% of candidates accept a counteroffer made to them
- ~80% of candidates that accept a counteroffer are back on the market within 6 months
If you are reading this and have a hard decision ahead of you, start by taking a deep breath and appreciating that it is a wonderful position to be in - being wooed by two or more companies!
About Rocket
Rocket pairs talented recruiters with advanced AI to help companies hit their hiring goals. Rocket is headquartered in the heart of Silicon Valley but has recruiters all over the US & Canada serving the needs of our growing client base across engineering, product management, data science and more.
