It happens. An employee hands in their notice, and an hour later, they are in a room with their manager and talking about a salary they had been told a month before was impossible.
Suddenly, they are important and indispensable. They are vital for the future success of the company, and management has found the budget.
To the employee, it feels great. It’s validation for all their hard work. It feels like a win. Or is it?
So, what is a counteroffer? Why do they get made, and what both sides usually get wrong about them?
𝗙𝗢𝗥 𝗖𝗔𝗡𝗗𝗜𝗗𝗔𝗧𝗘𝗦
𝗧𝗵𝗲 𝗰𝗼𝘂𝗻𝘁𝗲𝗿𝗼𝗳𝗳𝗲𝗿 𝗶𝘀 𝗳𝗹𝗮𝘁𝘁𝗲𝗿𝗶𝗻𝗴, and that’s 𝘁𝗵𝗲 𝗽𝗿𝗼𝗯𝗹𝗲𝗺.
It feels like finally, the company values you. However, what shows is that the company can be flexible when it wants to be. Ask yourself why, when you asked for a pay rise a few weeks previously at your last salary review, there was nothing they could do.
𝗪𝗵𝗮𝘁 the research shows.
You will have seen various statistics trotted out before. ‘80 or 90% of people who accept a counteroffer leave within a year anyway’. The truth is that it is hard to find where that figure comes from. Nobody can point to a solid original source. It gets repeated because it sounds right, not because it’s accurately measured. You need to take this into account when deciding what to do.
There is research from Cornell’s ILR School that found that more than half of employees who accept a counteroffer reported feeling less happy in the role afterwards, and only a small minority felt their relationship with their employer improved. Most who accept still move on within two years. The exact number to leave by isn’t the point. The pattern is.
𝗪𝗵𝘆 𝘁𝗵𝗲 𝗽𝗮𝘁𝘁𝗲𝗿𝗻 𝗲𝘅𝗶𝘀𝘁𝘀.
If people are honest, money is rarely the whole reason they started looking for a new job. It’s the culture, the manager, the lack of growth, the feeling of being overlooked. A counteroffer fixes your salary. It doesn’t fix any of the other issues. The chances are that you will be back here again, just older and slightly wearier.
𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀 you need to 𝗮𝘀𝗸 𝘆𝗼𝘂𝗿𝘀𝗲𝗹𝗳 𝗯𝗲𝗳𝗼𝗿𝗲 𝘆𝗼𝘂 𝗮𝗰𝗰𝗲𝗽𝘁:
1. If I hadn’t resigned, would this raise or promotion have happened at all?
2. Has anything changed, or is it just the number on my pay slip?
3. Will my manager trust me the same way now they know I was ready to leave?
4. Am I solving the real problem, or postponing it?
𝗙𝗢𝗥 𝗛𝗜𝗥𝗜𝗡𝗚 𝗠𝗔𝗡𝗔𝗚𝗘𝗥𝗦
𝗔 𝗰𝗼𝘂𝗻𝘁𝗲𝗿𝗼𝗳𝗳𝗲𝗿 𝗶𝘀 𝗮 𝘀𝘆𝗺𝗽𝘁𝗼𝗺, 𝗻𝗼𝘁 𝗮 𝗳𝗶𝘅.
If someone’s resignation is what finally gets them a fair salary, that’s not a retention win. That’s a process failure you just found out about the hard way. The resignation letter didn’t create the problem. It just made you look at it.
𝗧𝗵𝗲 𝗿𝗲𝗮𝗹 𝗰𝗼𝘀𝘁 𝗼𝗳 𝘀𝗮𝘆𝗶𝗻𝗴 𝘆𝗲𝘀.
Widely cited figures put the cost of replacing a senior employee at well over their annual salary once you count recruitment, ramp-up time, and lost productivity. That number gets used to justify counteroffers, but it cuts both ways. If someone leaves anyway a year later, having burned that goodwill and that budget, you’ve paid the replacement cost regardless, just later and with more disruption in between.
𝗪𝗵𝗮𝘁 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗰𝗵𝗮𝗻𝗴𝗲𝘀 𝗯𝗲𝗵𝗮𝘃𝗶𝗼𝘂𝗿 𝗼𝗻 𝘆𝗼𝘂𝗿 𝘁𝗲𝗮𝗺:
1. Regular, honest pay reviews, not just ones triggered by a resignation.
2. Asking people what’s not working before they’ve become disengaged, not after they’ve signed elsewhere.
3. If you do counteroffer, be honest about why it took this long to get here and fix the actual reason they looked at in the first place. The money on its own won’t hold anyone.
Counteroffers aren’t wrong. They’re just rarely the solution either side thinks they are.
If you’re the one resigning, know what you’re really accepting. If you’re the one countering, ask yourself what you’re really avoiding.
Conclusion
Counteroffers feel like validation, but rarely fix what made you look in the first place.
The famous statistic that most people who accept one leave within a year doesn’t have a solid source, but the underlying pattern is real. Research-backed data shows lower satisfaction and weaker trust afterwards.
For candidates: work out if anything’s changed, or just the salary.
For hiring managers: a counteroffer triggered by a resignation is a sign your pay and check-in process needs fixing, not proof it worked.
Would I ever advise someone to accept a counteroffer? Yes. If the counter genuinely addresses the reason you were leaving, not just the pay, and you trust the relationship will hold. That’s the exception though, not the rule. Be honest with yourself about which one you’re in.
The other issue is, if it’s professional to resign and accept a counteroffer, especially if you’ve accepted a job offer at another company. My view is that if you’ve signed a job offer with another company, then you should not accept a counteroffer, no matter how good it is. You’ve given your word to someone else and that should count for something. If you haven’t signed, then that’s different, but it will cost you something with the other company, who held a role for you, and with your own manager, who now knows you were prepared to go. That doesn’t mean never do it. It means go in with eyes open about the cost.
On the other side should managers ever counteroffer? For the right person and the right reason. But treat it as a one-off fix for a specific situation, not a retention strategy. If you’re regularly countering resignations, that’s telling you your pay bands or your check-ins are broken.
What would be a better process would be to ask people directly, before their job hunting, what would make them consider leaving. Do it in a normal one to one, not a crisis meeting. Most people will tell you honestly if they feel safe doing it, and that’s a far cheaper conversation than a counteroffer.
