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The lure of the counteroffer

As Ireland edges closer to full employment, it is increasingly becoming a candidate's market and the automotive sector is particularly competitive when it comes to attracting key talent.
Our clients naturally want to attract top candidates and can sometimes assume that an offer directly made to a candidate will automatically result in acceptance. Any strong candidate making a move will want to do so on the basis of an increase in earnings, greater responsibility or further career development.
Companies are going to have to come to terms with the fact that a counteroffer is almost inevitable.
In this competitive market, companies are going to have to come to terms with the fact that a counteroffer is almost inevitable, especially for high performers. From a recruiter's perspective, calling a candidate with the news of an offer should be a time of great excitement but unfortunately, sometimes this is where the process just begins. Two things will then happen; either a negotiation will begin, whereby the company will need to improve on the offer, or the candidate will accept their existing employer's counteroffer.

Naturally, it can be somewhat disappointing when a counteroffer is accepted, particularly against the backdrop of previous conversations with the candidate who has given a cast iron commitment of their willingness to move or their reassurance to the new company that they are coming on board.
Questions a candidate should ask themselves
Why do you need to threaten to quit to obtain a pay rise?
If your employer presents you with a counteroffer in the form of an increase in salary, it is worth thinking about why this pay rise wasn't offered before. Being fairly rewarded shouldn't be postponed until there is a threat to leave your company. You also need to consider if the pay rise on offer is simply a planned annual rise brought forward.
Will things really change?
Accepting a counteroffer, purely on the basis of an increased salary, will initially leave you feeling euphoric, however, this will likely be short-lived. At the heart of most people's decision to seek a new role, is unhappiness in their current employment. Typically, this unhappiness stems, not from financial reward, but more from a sense of lacking direction or challenge in a role, disaffection with management or a lack of responsibility. A small percentage increase in salary will not address these fundamental issues.
Think about a new opportunity
A new position with a company presents an opportunity to challenge yourself in a fresh environment, develop your career and embrace new skills. Originally accepting an offer from a new employer and then simply using that offer as leverage to improve your current package, will have the negative effect of excluding you from potential opportunities with that company in the future.
Consider the consequences
From our own observations, candidates who accept counteroffers can sometimes find that the relationship with their employer is irrevocably damaged. The employer can feel that they had a gun put to their head at a particularly busy period in the year and had no option but to offer more money.

In our experience, many candidates who accept a counteroffer quickly find that the fundamental issues they were trying to change in their career have not changed, their relationship with their manager has cooled significantly and the benefit of extra money soon pales into insignificance when compared to the negative working environment they now find themselves in. Furthermore, the vast majority of candidates who accept counteroffers are often back in the employment market within 6 months of accepting the counteroffer.
Think the counteroffer through
This article is not designed to criticise or dissuade people from seeking counteroffers as part of the interview process but is more of an observation on our behalf of the pitfalls in engaging in this tactic.

The one piece of advice we would offer to any candidate when considering a counteroffer is to not only give it the appropriate time it needs to consider the offer itself, but once they have decided to accept, to ensure the offer is provided in writing. We have seen countless examples of counteroffers being framed around future career growth, greater responsibility, educational assistance etc. however, more often than not, these promises never materialise.
Fundamentally, if you are made a counteroffer, take a big step back and weigh up your options before rushing into a decision. Ask yourself, "does this counteroffer deal with the original concerns I had which prompted me to consider a move in the first place and does the increase in salary mitigate against the changing nature of the relationship between me and my current employer?"
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