Ask a Recruiter: The Counteroffer

Don't think this applies to you?  Think again--counteroffers are everywhere these days.  It's almost always easier and less expensive to keep you on the team (for now) than it is to spend time, effort and money looking for and training your replacement.

At some time in your career, you have probably heard that the most effective way to guarantee that your boss will start looking for your replacement is to accept a counteroffer.  It's true.

Here's why:

1.  Trust.  Think about it--every time you have a dentist appointment, have to leave early to pick the kids up from school or take a vacation day, in the back of your boss's mind, he/she is wondering if you're out on a job interview.
2.  Trust continued.  If your boss can't trust you, guess who makes the top of the list next time there's a RIF?  That's right, you do--especially if your counteroffer involved a significant raise.  And if you're offered a severance package, it is almost guaranteed to include a non-compete clause that makes it impossible to seek employment with your company's direct competitors. 
3.  Fact: According to the National Employment Association, 80% of the people who accept counteroffers are no longer with the company 6 months later.
4.  A counteroffer is a temporary fix; not a long term solution.  Why did you decide to pursue opportunities outside of your organization in the first place?  Better hours?  Company culture?  Shorter commute?  Upward mobility?  It is unlikely that a counteroffer will fully and specifically address the concern that originally led you to look.  Once the temporary excitement of being 'needed' wears off; once you realize that your big raise only works out to an extra $50 per week after taxes and insurance and that doesn't seem like such a great trade off anymore, you are inevitably back to square one.
5.  An attractive counteroffer means that your company only values you to the degree required to keep you from leaving.  If you are worth 120K today, why weren't you worth 120K a year ago, when you started, or when you asked for a raise two months ago?  A company that is clearly only interested in paying you as little as it can get away with may not be the sort of company you want to be a part of for the long term.  Obviously, you can do better.