You’ve found the right person.
The interviews went well. The references checked out. You made the offer, they said yes, and you’ve started planning their first week.
Then the phone rings.
“I’m really sorry. When I handed in my notice, my boss made me a counter-offer. I need some time to think about it.”
It’s one of the most frustrating moments in hiring, and it happens more often than most employers expect. It also tends to come up more at this time of year, when people want to resign before the Christmas break and their current employer is facing the prospect of starting the new year a person down.
The good news is that a counter-offer is rarely a complete surprise if you know what to look for. And when one does land, how you respond makes a real difference.
Why counter-offers happen
From the current employer’s side, losing a good person is expensive and disruptive. There’s the cost of recruiting, the time it takes a replacement to get up to speed, and all the knowledge that walks out the door with them. The real cost of staff turnover is usually much higher than people think.
A counter-offer is often the fastest way to make that problem go away. More money, a new title, a promise that things will change.
But it’s usually a reaction, not a plan. Very few counter-offers come from a business that had already been thinking about how to grow that person. They come because a resignation letter landed on the desk.
Why candidates are tempted
Changing jobs is a big decision, and resigning is uncomfortable. Even people who are ready to move feel a real pull of loyalty to their team and their manager.
A counter-offer can feel like the best of both worlds: a pay rise without the risk of starting somewhere new. It’s also flattering to be told you’re valued, sometimes for the first time in a long while.
None of that makes the candidate difficult or disloyal. It makes them human.
What a counter-offer doesn’t change
When I talk with candidates about why they’re looking, money is rarely the only reason. More often it’s leadership, a lack of growth, not feeling recognised, or a culture that no longer fits. I wrote about this in Hiring Beyond the CV: people rarely leave companies they genuinely love working for.
A counter-offer can fix the pay. It rarely fixes the reasons they started looking in the first place.
There’s also a question many people end up asking themselves a few months later: if I was worth this much, why did I have to resign to get it?
How to reduce the risk before you make an offer
The best time to deal with a counter-offer is before it happens. A few things make a real difference:
- Understand why they’re moving. Ask early and listen properly. If you know what’s driving the move, you can show how your role answers it.
- Ask the question directly. “If your employer offered you more money to stay, what would you do?” The answer tells you a lot, and it gets the candidate thinking about it before they’re sitting in front of their manager.
- Pay at the market. An offer that sits well below the market invites a counter. If you’re not sure where the market is, salary benchmarking is worth doing before you go to offer.
- Move quickly. Long gaps between interviews give a candidate time for second thoughts, and give their current employer time to notice something is going on. Here’s how long a good recruitment process should take.
- Talk about the resignation conversation. Ask how they plan to resign and how they think their manager will react. Being prepared makes it much easier to stay clear-headed in the moment.
When the counter-offer lands
Even with good preparation, it will sometimes happen. When it does:
- Don’t panic, and don’t jump straight into a bidding war. Matching dollar for dollar turns the decision into an auction, and the highest bidder isn’t always the right employer.
- Have an honest conversation. Go back to the reasons they wanted to move. Have those reasons changed, or just the number?
- Remind them what you’re offering beyond pay. The role, the team, the growth, the leadership. That’s usually why they said yes in the first place.
- If you improve your offer, do it for the right reason. Adjust because the role and the market justify it, not just to win.
- Respect their decision. If they choose to stay, part on good terms. New Zealand is small, and the Waikato is smaller. People remember how they were treated, and the timing may be right in a year or two.
- Keep your other candidates warm. Don’t close the door on your shortlist until your new person has resigned and their notice period is underway.
And if it’s one of your own people resigning
Counter-offers work both ways. If someone in your team hands in their notice, it’s tempting to reach for a counter-offer straight away.
Before you do, ask why they’re leaving and really listen to the answer. If the real issue is growth, workload or leadership, more money will only buy you time.
The better fix is to deal with the cause, ideally well before anyone resigns. Regular salary and performance reviews and good retention habits mean your people don’t have to resign to have that conversation.
Final thought
A counter-offer isn’t a sign you picked the wrong person. Often it’s a sign you picked someone worth keeping.
The businesses that handle counter-offers well are the ones that understood their candidate from the start: what they wanted, why they were moving, and what would make them stay. That’s the same thing that makes a hire work long after the first day.
If you’re hiring before the end of the year and want a sounding board on an offer, a counter-offer or what the market is doing right now, I’m always happy to talk it through. You can get in touch with me here.
