Should You Take That Counteroffer?

You've quit your job to take a new one, but your current boss offers you a raise so you'll stay. Do you accept? Not a good idea. Here's why.

Should You Take That Counteroffer?

It seems like the perfect situation: You feel you aren't paid what you're worth in your current job and decide to check out alternatives. After a secret job search, another employer offers you a lot more money. But when you tell the boss you're quitting, he offers you a raise to keep you.

Do you take the counteroffer? Experts weigh in on what can happen if you do—and how to handle an unsatisfying job situation in other ways.

Counteroffer consequences

"The upside is you will get more money and maybe different responsibilities and a position that may further your career," says Emory Mulling, chairman of Mulling, an outplacement and executive search firm. "But there are more downsides."

According to Christopher Elmes of the Capital H Group, a human-capital consulting firm, studies show the average employee stays with his employer less than a year after accepting a counteroffer. "No matter what the offer or counteroffer is, if the underlying job dissatisfaction issues aren't addressed, then it doesn't make a difference," he says.

Your reputation within the company can suffer, too. "The sense of affiliation between the employer and the employee will be severed, and the employee may never be trusted again," Elmes says. "Once you take the counteroffer, your relationship is now almost entirely predicated on cash, and that is not a healthy criteria."

Finally, if word gets out about the deal, your relationships with coworkers could also be damaged. "Your peers may be envious that you got more money by turning in notice and wonder why you deserved that," says Mulling, who for those reasons advises employers not to counteroffer.

Different ways to deal with job dissatisfaction

Instead, it's best to step back and consider why you're dissatisfied with your current job before shopping for a new one. "Before you get into that situation, make every effort to understand why you're willing to entertain the offer to move," Elmes advises.

Then meet with your boss and talk about changes that could make you happier, such as different assignments, more responsibility, flexible hours, more recognition or the possibility of a promotion—in addition to a raise. When you give the boss the opportunity to help you, your relationship can actually grow stronger.

Mulling recommends initiating a discussion about your future. "You never make a threat," he advises. "Instead, you go to your boss and ask for career advice. Ask about where do you see my career going, what do you think will be available for me in the future. Let them know that you're very satisfied where you are, but you want to do some long-range planning."

Many people never have that kind of conversation, because they're afraid they won't like their boss's answer. You will be a lot more successful if you've done a good job so far and had a good attitude. "It all depends on your past performance reviews and where you are in your salary range," Mulling says. "If you've received average reviews and you're in the midpoint in your salary range, you probably don't need to ask."

If your boss doesn't budge, it could be a great time to look for another job—and if the offer is good enough, actually take it.

"When you go to turn in your resignation, then you need to be so sold on that new opportunity that a counteroffer would not persuade you," Mulling says. If you are easily persuaded by the offer of extra money, "then you haven't done a good job of searching for the best opportunity."