Here's How to Handle a Counteroffer From Your Current Employer

You stride into your boss’s office with the big news: You’ve got a new opportunity, and you want to announce your resignation. Suddenly, you’re the most important person in the company—with a proposed raise, perhaps more time off and other perks to match.

While it can feel awesome to suddenly be the belle of the ball, you’ll have some soul searching to do. Here’s how to negotiate the counteroffer like a boss.

How to evaluate a job counteroffer

Whether it’s a counteroffer or you’re deciding whether you want to accept a job offer from a new company, it’s typically best to pause for a moment and ask some important questions.

• Is the job what you want for the next phase of your career?
• Are you a good match for the company culture?
• Do the salary and benefits meet your expectations?
• How does the job fit with your lifestyle? Does it offer flexibility such as remote work, generous time off or other benefits beyond compensation?

If you are evaluating a counteroffer, it’s also important to re-examine why you started looking in the first place. If your compensation was the main reason you wanted a new gig, then the counteroffer might be enough to lure you back. But if you find a number of signs that it’s time to change jobs or you’re suffering from burnout, the factors above may not be enough to overcome these intangibles.

It's also a good idea to consider why the company is making the counteroffer. If your managers were truly unaware they were out of line with your value, this might be just the wakeup call they needed. But if they’re offering the world because they’re panicked, not for a good business reason, you may put yourself in a bad position for the future.

Once you decide whether you’re going to stay or go, the real work begins.

What to do if you decide to accept the counteroffer and stay at your job

Consider whether you should counter the counteroffer

If money was the issue and the counteroffer gets you closer to your goal, it’s possible to ask whether there’s any room for salary negotiation. But this is definitely a conversation to approach carefully and rehearse before you go into it. If the counteroffer from your current company is still below the offer from the new company, you could use the other offer as a starting point.

Negotiate other aspects of your job

While pay may be a non-starter—particularly if the counteroffer is more than what you were offered at the other company, there may still be ways to negotiate. Maybe there were other parts of your job you wish were better. Use the counteroffer as an opportunity to change the things that might have led you to look for another job in the first place.

Perhaps you’re looking for job benefits outside salary, like the flexibility to work from home or an extra vacation. Or if more responsibility or getting to work on bigger projects is what you’re after, now’s the time to speak up.

Close the loop quickly with the other company

Once you’re certain you’ll stay at your current job, tell the other company you were speaking with as soon as possible. You might say something like: “Thank you so much for offering me this opportunity with [company name]. After much consideration, I decided to accept another opportunity with my current company that I felt was more in line with my career goals. I really appreciate all the time you and your team took to meet with me and discuss this role, and I wish you all the best.”

Timing is key, because no one ever looks good refusing an offer they have previously accepted. Typically, a company will extend a verbal offer and then put the offer in writing only after the person has agreed to the verbal one. The least painful time to refuse is before a company goes through the trouble of preparing a written offer.

What to do if you decide to decline the counteroffer and leave your job

Consider whether to counter the offer

If you’re going to negotiate the offer at your new job, you may want to consider doing so on the merits of the offer rather than using the counteroffer from your old job. Potential employers are no stranger to negotiation, but using a counteroffer at your current job as leverage could leave a bad taste in the new employer’s mouth.

In a worst-case scenario, a potential employer could rescind its offer. When you do negotiate, practice what you’re going to say. You may want to consider using a mirror or recording yourself because what you say is as important as how you say it.

Don’t be swayed by a guilt trip

You should never feel bad about taking the next step in your career. In extreme cases, your manager may even plead with you or ask something like, “How could you do this to us? We need you. The department can’t run without you.” Or they may tout the big plans they were just about to announce as proof that things will change. Remember that you’re leaving for a reason.

Make a graceful exit

Offer your current company at least two weeks’ notice—although more is better if you’re in a senior position. There are some simple steps that you can take to leave your company on good terms, including these:

• Make a plan to announce the news.
• Work to ease the transition of work to others as much as possible.
• Stay in the game mentally right through your last day.
• Don’t badmouth anyone.
• Stay in touch with your co-workers.

Revisit your financial plan

Whether you’re getting a nice bump in pay at your current job or a new one, changing jobs is an important time to look at your financial picture more broadly. Your Northwestern Mutual financial advisor can help you look at your benefits package and supplement anything you might be missing. They can also help with a plan to put your additional earnings to work—whether that’s for life today, something in the future or a mix of both.