How Do I Respond to a Counteroffer from my Current Employer?

Note: This article was originally posted on https://gogpac.com/knowledge-center/should-i-accept-a-counteroffer/

Imagine you’ve just landed an amazing career opportunity , or maybe a great job offer just came your way unexpectedly. You’re excited to move forward and take the next step. But just as you’re ready to say farewell to your current role and colleagues, your employer presents a counteroffer, creating a professional dilemma: Should you take it?

You may not have expected a counteroffer, or perhaps it was something you were hoping for all along. Either way, the key question now is: How do you evaluate and respond to your current employer’s counteroffer?

What is a counteroffer?

A counteroffer, in simple terms, is a new proposal presented in response to an original offer, often with different terms or conditions. In the business world, it generally refers to your employer’s effort to retain you when you announce your intent to leave for another position.

Counteroffers can also occur during salary negotiations. For example, if a potential employer presents a lowball initial salary offer , you could either decline and wait for a better one or respond with a counteroffer to bridge the gap between your salary expectations and the company’s budget.

The aim of a counteroffer varies based on the situation. For job candidates, it’s a chance to negotiate an offer to better suit their needs. For high-performing employees who receive an enticing offer from another company, a counteroffer from their current employer may appear as a last-ditch effort to hold onto talent. But what should you consider before deciding to accept or decline?

Understanding a counteroffer from your current employer

While many sources advise turning down counteroffers outright, it’s essential to remember that every situation is unique. Statistics show that of the 73% of employees who accept counteroffers , 94% report an unchanged or even improved relationship with their employer, staying an average of three and a half years longer.

Take a moment for self-reflection. Even if you weren’t actively seeking a new role , were you considering a change? Some people feel stuck but don’t make a move until a great opportunity appears. Others are unclear on what’s causing their dissatisfaction but hope that changing jobs will resolve it.

Something prompted you to accept a new job offer. Think carefully about each factor behind your decision. Was it an issue of work-life balance, career growth, or a toxic work environment? Did you previously request a promotion that never materialized? Jot down each reason to ensure clarity as you weigh your options.

The basics for evaluating a counteroffer

Counteroffers can be complex, especially if they come as a surprise. Often, employers extend counteroffers immediately after you hand your two-week notice , potentially catching you off guard. Ideally, you’ll have time to think it over—don’t rush into a response, as it could impact your negotiation power .

Preparing for the possibility of a counteroffer

Realistically, you should consider your motivations early in the process, ideally before engaging in job interviews . If you’re working with a recruiter, they may help clarify your priorities. However, if you discovered the new role independently, take time to prepare yourself for a counteroffer, ensuring that you’re ready to make the best choice.

Carefully examine the details of the counteroffer

Remember, a counteroffer may not just involve a pay raise; it could include changes to your responsibilities and performance expectations. If the offer involves a promotion or raise but also imposes unrealistic demands, you might find yourself in a more stressful position than before.

Compare the counteroffer with your reasons for leaving

Even if a counteroffer seems appealing, consider whether it addresses the core reasons you were planning to leave. If you were motivated by a negative work environment or ongoing issues with your manager or colleagues, a salary increase wouldn’t resolve those problems.

Unless your employer recognizes and commits to addressing these issues, the situation may remain unchanged. Protecting your mental well-being should be a priority in any decision.

Evaluate potential career growth with your current employer

If your decision to leave is based on career advancement, there’s a chance the counteroffer includes a new growth opportunity. If not, take the opportunity to discuss your long-term role and ask whether a development plan can be put in place. If your employer is serious about your future, ask to formalize this plan in writing as part of your agreement.

Assess your employer’s willingness to negotiate

If the counteroffer falls short of your salary expectations, you might be able to negotiate terms that better align with your goals. Your employer’s flexibility during salary negotiations can indicate how much they value your contributions. Don’t hesitate to request additional benefits, whether that’s higher compensation, remote work options , or other perks. Keep in mind, however, that such requests may be accompanied by increased responsibilities.

Declining a Counteroffer

If, after careful consideration, you decide to proceed with your new job opportunity, you can decline the counteroffer without damaging relationships. Keep your response respectful and express appreciation for their time and efforts. Here’s a sample response:

Dear [Employer’s Name],

Thank you for the counteroffer and for taking the time to listen to my concerns. However, I’ve decided to move forward with a new opportunity that aligns with my career goals. I’m committed to ensuring a smooth transition and happy to assist with training my replacement as needed.

Sincerely, [Your Name]

Accepting a Counteroffer

If you conclude that the counteroffer fully addresses your needs and represents a commitment to your future with the company, consider accepting it. But take your time before making a final decision to inform the prospective employer. Here’s an example for accepting a counteroffer:

Dear [Employer’s Name],

I want to express my gratitude for presenting a counteroffer and for the time you invested in negotiating the terms. After careful consideration, I’ve decided to accept your offer. I’m prepared to meet the challenges of my new responsibilities and committed to contributing to the company’s success.

Thank you again, and I look forward to continuing my journey with the talented team at [Company Name].

Sincerely, [Your Name]

Your choice should ultimately align with your personal and professional goals. Reflect on whether you’re truly excited about the new job, and if the counteroffer addresses all the reasons you were planning to leave.

If you’ve already made up your mind about the new role, don’t lose sight of the opportunity you were initially drawn to. In the end, be confident in embracing what you want and in leaving behind what doesn’t align with your goals.