A counteroffer is a revised offer made to retain or recruit a candidate. Most commonly, a current employer makes a counteroffer—often higher pay or a promotion—to keep an employee who has resigned to accept another job. Counteroffers can also occur during negotiation when a candidate proposes different terms than an employer's initial offer.
A retention counteroffer happens when an employee resigns to join another company and their current employer responds with improved terms—such as a raise, promotion, bonus, or expanded role—to persuade them to stay. Employers make counteroffers to avoid the cost and disruption of replacing a valued employee. However, studies suggest many employees who accept counteroffers leave within a year, because the underlying reasons for seeking change often remain unaddressed.
Counteroffers are a key reason candidates renege after accepting a job, lowering an employer's offer acceptance rate and forcing a restart of the hiring process. Recruiters mitigate this risk by understanding a candidate's motivations beyond salary, maintaining engagement after the offer, and preparing candidates for the possibility of a counteroffer from their current employer. A compelling employer value proposition reduces the likelihood that money alone will retain the candidate elsewhere.
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