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how to negotiate a counter offer with your current employer

5 min readpublished 01 November 2022updated 24 January 2023

Counter offers are a strange thing. On one hand, it’s wonderful to know that your current employer values you so much that they’re willing to offer you more money or perks to stay. On the other hand, it can create some confusion.

Whether you stay or not depends on the generosity of the counter offer and how it stacks up against other potential job offers. All is not lost if the counter offer isn’t as generous as you would have liked, since it still puts you in a good position to potentially negotiate a better deal for yourself.

In this guide, we’ll take a detailed look at this subject, including what a counter offer is and how to negotiate one with your current employer.

What is a counter offer?

A counter offer is a deal proposed by your current employer in an attempt to retain you as an employee. A counter offer is usually made when you express an interest in leaving your present employer or when they hear through the grapevine that other companies are interested in you.

A typical counter offer will include one or more of the following perks:

  • a pay raise
  • reduced hours for the same pay
  • flexible working arrangements
  • extra employee benefits — healthcare, wellbeing packages, etc.
  • more holiday time

If you receive a counter offer, it generally means that your employer sees you as a high-value employee and that they are eager to retain your services. It’s often very flattering to find this out, but it means that you may be faced with a tough decision.

How to get a counter offer from your current employer

The most common way to get a counter offer from your current employer is to share with your manager your intention to leave the company. When your employer is faced with the prospect of losing a valued staff member, they may be motivated to hold onto you by making a generous offer.

Your employer will weigh the pros and cons of making a counter offer. If you leave the company, they will need to replace you, which could mean a lengthy recruitment process, onboarding, and training. This can be both time-consuming and costly.

If your employer decides that keeping you is in the best interests of the company, they may put together a counter offer designed to entice you to stay. To do this, they’ll look at the average salaries and benefit packages that are offered elsewhere and try to match them.

How to handle a counter offer the right way

If you receive a counter offer, we advise that you avoid making an immediate decision. You’ll probably be happy to receive a counter offer, especially if it contains a considerable pay raise, but you should not make a decision until you have considered all of your options.

In most cases, your decision will boil down to three choices:

  • Accept the counter offer
  • Try to negotiate better terms
  • Decline the counter offer and continue looking for a new job

The counter offer will probably be communicated to you in a meeting with your manager. Your manager will let you know the details of the package and how much time you have before you need to let them know of your decision. Before advising them of your choice, you need to compare the counter offer with any job offers on the table or potential interviews that you have lined up.

Broadly speaking, you’ll need to consider the following: the details of the compensation package on offer; your lifestyle and work/life balance; how you feel about your current employer; and how you’re likely to feel about working with a new employer.

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How to decide whether a counter offer is worth accepting or not

The truth is that deciding whether to accept a counter offer is not easy, since it isn’t entirely about money. You need to weigh all the different factors surrounding the decision, not just the financials.

Here are some important things to consider when deciding whether to accept a counter offer:

  • Were you offered a pay raise? If so, does the new salary match what is on offer elsewhere?
  • Are you happy with your current working conditions, environment, and people? Do you have a good working relationship with your manager?
  • Has your employer offered you any additional benefits? If so, how valuable are these to you?
  • Will rejecting the offer negatively affect your reputation? Will you burn your bridges if you refuse the counter offer?
  • Is there a chance to negotiate a better deal for yourself? If so, how much is a reasonable amount to ask for?
  • What are the career development prospects like with your current employer? What are they like elsewhere? Are there plenty of open tech jobs?
  • Ask yourself why your employer is making a counter offer — is it just to avoid the cost and hassle of replacing you or do they actually value the work you do?
  • How likely are you to be successful when interviewing for other jobs?

Once you have weighed the pros and cons, if you feel that the counter offer is not generous enough to accept, you may want to try negotiating a better deal for yourself. This involves going back to your manager with your requests. If your manager is open to negotiating the terms of the offer, then you can put a proposal in writing.

If you have already received a job offer from another company, you may be wondering how to leverage that offer with your current employer. In this situation you are in a good position to negotiate a better counter offer.

Just remember not to be too greedy if you try to negotiate a new deal. Don’t request a salary that is way above the industry average, for example, unless you truly believe that you’re worth it! Your employer may decide to withdraw the original counter offer if they don’t agree with your assessment of your value.

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Final thoughts

The most important thing to realize when it comes to negotiating a counter offer is that you have the power to decide. Don’t feel pressured into making a quick decision and, if you need support, you can always talk things over with a recruitment consultant or industry expert.

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