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Using Counteroffers to Stop Invading Forces from "Invading" Your Roster

Over the past couple years, it appears that the focus for hiring managers has shifted from talent discovery to talent retention. There’s a tight, hotly-contested market for quality candidates unfolding right before our eyes as the available talent pool has shrunk to unprecedented levels. When these conditions exist (a “buyer’s market” as they say in the real estate industry), the candidates hold most, if not all, the leverage in their career evolution. When a key employee informs you or your HR staff they’re intending to leave for a new opportunity, you have a way to reclaim them back into the fold: a counteroffer. This article, the next installment of our “How to Outplay the Talent Game”, will outline how to counteroffer and what to and what not to counteroffer with so that your team and company can remain on the same path.

When to Counteroffer

“It can make financial and workforce-dynamics sense to negotiate when the following conditions are met:

  • The employee in question is truly an integral part of your team, and is worth the effort (and expense) of counter-offering

  • It would be difficult, or overly expensive, to replace that person if they were to leave

  • You can manage the expectations of your other loyal employees so that they don’t all run out to get competing offers of their own, assuming you’ll match them

  • Your company can afford to match the valued employee’s offer dollar for dollar, OR can provide appealing alternatives to salary such as flexible hours, telecommuting, a better title, increased responsibilities, enhanced benefits that are inexpensive, etc.

  • There is little likelihood the valued employee will take advantage of you by getting lazy, uncooperative or downright snooty after accepting your counter-offer.” (Swartz,

Mark Swartz of Monster Canada explains that not every potential departure can or should be annulled with a counteroffer but presents a few conditions for when it is highly recommended a counteroffer be in play for an employee. In a nutshell, if the employee holds a key position, possesses a valuable wealth of company or procedural knowledge, and performs a very intricate, hard-to-replicate role, then a counteroffer should be gathered.

What to Counteroffer With

Once the decision to create a counteroffer is made, there are a few factors to evaluate and weigh:

Start Your Negotiations by Finding Out the Employee’s Needs - If you do choose to negotiate a counter-offer, you’ll probably want to ask the employee why they’d sought out a job elsewhere in the first place. Is it really because they feel underpaid here? The more you understand the person’s underlying motivations, the better your chances are of offering what matters most to them.”

One common mistake companies make is guessing that the deciding factor for an employee to leave is financially-motivated. If you take the time to learn what your employee is actually seeking, you may not even have to provide a significant bump in salary, even though it probably wouldn’t hurt. Non-financial perks or benefits described in the next point could be the key to retention.

Play Up Your Non-Financial Benefits First - Smaller employers often have limited budgets for raises and bonuses. So, point out all the wonderful things about working at your company compared to the other employer. Maybe you’re closer to the employee’s home or more accessible (by transit, walking, cycling). Do you have a friendlier workplace culture that’s less formal?”

As all the business articles will tell you, Millennials specifically, today’s employee finds more value in work-life balance, experiences, and community-building than money compared to previous generations. If non-financial considerations such as remote work opportunities or off-site collaboration will be enough to retain to key employee, then those avenues should be explored and developed.

Can you offer personalized mentoring? - You are trying to emphasize the relative positives your company provides. If you can make the person feel valued or assign them to a great boss, on the whole these may outweigh a 20% pay raise (which will probably get taxed at a higher rate anyway).”

Perhaps the employee is leaving because they feel they have reached the ceiling in their role or in the company. You could retain them just by offering mentorship opportunities, carving out and initiating a leadership element to their current role, or providing cross-functional responsibilities with a different department or area of the company. If the current structure or environment of your company has complicated or limited upward mobility at the moment, it may be time to consider horizontal mobility and expanding the employee’s reach in order to keep them aboard.

Try Not to Be Outrageously Generous Financially - Maybe you can fully match the competitor’s compensation offer, maybe not. If you absolutely must meet their figure – or even offer a premium above it – and you can afford to do so, use this as a last measure only. In any event, salary isn’t the only way to boost compensation. How about increasing the employee’s education allowance? Also, adding another week of paid vacation is a popular perk.” (Swartz,

If only compensation elements are at your disposal when crafting a counteroffer, then added paid-time off and student loan alleviation/contributions can be other avenues to explore.

How Not to Counteroffer

Workopolis, an organization that helps employees needing special assistance find careers, hosted a podcast with their Sr. Director of Human Resources Aimee Rieck to discuss the top five mistakes employers make when presenting a counteroffer to employees:

Mistake #1: Low balling - While you don’t want to start making wildly high offers to valuable employees to get them to stay (there’s only so much space in the budget, after all), you also don’t want to go too far in the opposite direction.

Mistake #2: Making it all about money - “I think money as a motivator only goes so far,” says Rieck.

“Today, candidates are looking more for that well-rounded offer. So not only the dollars and cents, but also the perks that come with the job. Some of the more intrinsic rewards like, is the work motivating? Do they gain value out of the work that they’re doing? Is it in line with their career path?...So, I think the full package is what employees are really looking for today.”

Mistake #3: Taking it personally - If an employee doesn’t accept your counteroffer, you need to bow out gracefully and not burn any bridges.

Mistake #4: Getting employees to accept, only to lose them a few months later - Experts warn that even when an employee accepts a counteroffer, they end up leaving within six months anyway. How can you avoid this? Talking to your employee. A lot.

Mistake #5: Not keeping negotiations confidential (or as confidential as possible) - You hope that any negotiations with an employee remain confidential from start to finish – but things aren’t that easy. Employees talk. And when employees are talking about an individual’s counteroffer, it can lead to resentment.” (


In this current environment, counteroffering is a very necessary, yet delicate procedure where the slightest action or word could set things off in a spiral because both parties are negotiating from a position of uncertainty and vulnerability. The more honest and open the dialogue is, the more confident you can feel that you made the best offer possible and the more comfortable the employee can feel that you truly considered their needs. Should the counteroffer be accepted, then great. If not, then wish the employee well and cheer for their success should they return in the future or in the event you can develop a business-to-business partnership with them down the road (if they do not end up working for a competitor).

Read More

5 Counter Offer Mistakes Managers Make, Workopolis -

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