Counter Offer

An experienced designer receives another employer's offer and tells their manager they plan to leave, and the current employer may offer higher pay or a different role to retain them, which is a counter offer. The term also applies earlier in hiring, as a candidate may ask for a different salary, start date or work arrangement after receiving an offer, which should be distinguished from retaining an existing worker.

Understand the reason for departure: if the worker wants better pay, the proposed change may be relevant, but if they need a different manager or career direction, money alone may not solve it. SHRM's coverage of counteroffers discusses both their potential value and risks, and it does not establish a reliable universal percentage of employees who leave after accepting one, so avoid repeating unsupported statistics.

SHRM also argues that a counteroffer may need to address more than pay, so the practical question is whether the employer can honestly deliver the change the person needs. Set decision authority, because a manager should know who can approve pay, title, benefits or remote work and a verbal promise beyond their authority creates a second problem.

Check internal equity, since raising one person's salary only after a resignation may create unfair gaps with colleagues doing similar work, and review pay ranges and relevant obligations. Compare total terms, as base pay, bonus, leave, commute, growth and job content may all differ, and a number alone does not describe the full choice.

Do not make a rushed promotion, since a new title without real scope or support may disappoint the worker and the team, and write precise terms stating salary, effective date, role, reporting line and any conditions because ambiguous language about a future review is not the same as an approved increase. Give room to decide, as pressure, guilt or a demand for an immediate answer can damage trust, and an organisation with a deadline should state it calmly.

Avoid retaliation too, because a worker who explores a new role should not be punished for considering an offer, and contracts and local employment law should be applied before any adverse step. A counter offer has an opportunity cost, since the revised package uses budget that could address pay structure, training or team capacity, so estimate the continuing cost, not just one month's increase.

An illustrative annual base-pay change is revised salary minus current salary, so a rise from $150,000 to $165,000 adds $15,000 annually before benefits and employer costs, which does not quantify retention value. Consider the successor plan as well, because if the worker declines there will be handover and recruitment needs, and a counteroffer should not be relied on to eliminate operational risk.

Use a consistent process, since not every resignation warrants a counter offer but decisions should be explainable, with criteria such as role need, performance, budget and equity, and remember that an accepted offer elsewhere may represent a larger career change, so a small raise can make staying comfortable briefly without changing the underlying aim. Do not assume acceptance settles trust, as both sides may need a candid conversation about expectations, and if a candidate counters an initial offer, respond within the approved hiring range because a respectful negotiation is not evidence the person will be difficult to manage.

Review patterns, since frequent last-minute raises may show pay bands have fallen behind or managers are not having career conversations early enough, and for owners a counter offer is a targeted response to a real alternative that is sensible only when the revised terms are affordable, fair and likely to address the reason for the choice.