Home / Career Advice / Compensation / How to Handle a Counteroffer

How to Handle a Counteroffer

Woman holding ready to sign counteroffer and pen on a clipboard

Maybe you’ve been hoping for a counteroffer all along and are thrilled to have the option on the table. Maybe it came out of left field and now you’re stumped about how to proceed. Regardless of how your counteroffer came about, you’re faced with a major decision: take it or leave it? And what will either option mean for your career?

I’ll cover everything you need to know about handling a counteroffer: what it is, how to get one, and when to accept versus decline – plus some sample counteroffer responses to help craft your own response.

But first, know that all of the advice contained here is given without context….and context is a major factor when it comes to your unique situation, company precedent, and the individual personalities involved. There’s no one-size-fits-all advice for counteroffers, or as Ron Burgundy said, 60% of the time, it works every time.

What is a counteroffer?

When you’ve landed a new job and given your current employer notice that you plan to leave, they may offer you more money, more responsibility, a bigger job title, or some other incentive to convince you to stay. This is known as a counteroffer. 

Retaining a good employee is much more cost-effective than finding and hiring a new one, so it’s often in a business’s best interest to hold onto its top talent. Counteroffers are a standard part of corporate life, especially for companies in competitive fields like tech.  

Receiving a counteroffer is a nice option to have. It means your employer wants to keep you and is willing to put their money where their mouth is, so to speak. Depending on your situation, it might be less stressful to stay in a job and location you’re familiar with instead of facing the uncertainties that come with any career change.

Unfortunately, there are a lot of downsides to consider when it comes to counteroffers. Accepting a counteroffer can have negative implications for your career since you’ve made it known to your higher-ups that you were looking to leave. Regardless of your motivations, you risk creating the appearance that you have one foot out the door or that money is the only thing keeping you at your job. 

In a Harvard Business Review survey, nearly 40% of executives said accepting a counteroffer will negatively impact a person’s career, while 80% said negative consequences could include diminished trust and a compromised reputation. 

So when should you consider accepting a counteroffer? We’ll get to that in a minute, but first, let’s discuss how to obtain a counteroffer to consider in the first place. 

How do you ask for a counteroffer?

Asking for a counteroffer is a delicate conversation. After all, it reveals that you’ve been interviewing elsewhere, which may feel like a betrayal of your company’s trust. It can be awkward and nerve-wracking. 

Remember, though, that you are responsible for managing your own career first and foremost. Not even the greatest manager on the planet will prioritize one employee’s needs above those of the organization when making decisions. So, like everyone else, you should always focus on doing what is best for you and your future.

Related: How to Negotiate a Job Offer

Follow these steps to tell your employer you have another offer and ask them for a counteroffer. 

Assess the situation

First, decide whether a counteroffer is even realistic. If your company just announced a round of layoffs and they’re cutting budgets left and right, asking for more money is going to come off as incredibly misguided. You also don’t want to barge into your boss’ office and blurt out that if they don’t give you X, Y, and Z, you’re leaving. Instead, if you’re serious about the possibility of staying, consider what it would take and how realistic it is for your company to provide what you’re looking for. 

Be straightforward

The best place to begin is by asking for what you want without mentioning your outside offer. If you want more money, make the case for what you deserve based on your market research. If you want more responsibility, show how your track record demonstrates that you can handle it. You may be able to get what you want without ever having to reveal that you were considering leaving. 

Use the offer as leverage (if necessary)

If you’ve had an up-front conversation with your boss and you’re still getting a non-committal answer or they’re pushing to revisit the conversation at a later date, then it’s time to lay your cards on the table. Let them know that you’ve received an offer that meets your needs and you’re considering taking it. Don’t let the tone turn heated or emotional–this is a business conversation. Instead, be frank about where you stand and give them a date for when you plan to make a decision. 

Be prepared to walk

The big consideration with asking for a counteroffer is that you must be prepared to follow through on leaving if you don’t receive one. Once you reveal the fact that you’ve been looking elsewhere, some employers will unilaterally decide that it’s time for you to go. So, if the decision date you selected comes and goes without a peep from your employer, be ready to walk away.

Given the strong possibility of your employer accepting your resignation without countering, be sure the new offer is one you are excited to accept. Over the years, I’ve seen too many people end up taking a job they didn’t want when the counteroffer fails to materialize.

Related: How to Write a Resignation Letter 

Why accept a counteroffer?

Despite what many, if not most, recruiters like to say, accepting a counteroffer isn’t always a bad choice. It often works out beautifully for both the employee and employer. I’ve been involved in many positive outcomes—with staffing clients and first-hand with internal employees. Here are some situations where it might make sense to accept one. 

If it’s truly about money

If you’re generally happy with your job but your arguments for a raise have fallen on deaf ears, leveraging a counteroffer may be the way to show your employer that you’re serious about leaving. However, be wary of how this will affect your reputation. Also, consider whether there’s truly a future for you at a company that refuses to pay you what you’re worth unless you threaten to leave. 

If they show that they’re willing to make meaningful change

If you’re looking for a change to your role, a shift in responsibilities, or more leadership opportunities, your employer may very well be able to accommodate your requests. This is why having an honest conversation with your boss is so important. It will help you assess whether your employer is genuinely committed to making the change you’re after, so you can factor that into your decision. 

Why reject a counteroffer?

Rejecting a counteroffer is probably the right choice if one of these statements is true. 

You have significant reasons for leaving

Most people don’t leave their jobs based on money alone. More often, it’s a problem with leadership, overwork, lack of advancement opportunities, a poor work environment, or a combination of all of these. A larger paycheck isn’t going to fix any of these things, and accepting a counteroffer is probably just delaying your inevitable departure. 

It could affect the way you’re treated

Even if an employer makes a counteroffer in good faith, managers are only human and their knowledge that you were looking to leave is likely to color their interactions with you. They might not feel fully confident trusting you with sensitive information or giving you the lead on projects, which is probably the exact opposite of what you were hoping to achieve. 

It could damage your professional reputation 

It’s not only your current employer you have to worry about–remember that there’s another company involved, as well. If you make it to the point of getting an offer from them (and possibly accepting it) and then go back on it, you’ll burn a bridge with that employer for good. If word gets around, it could hurt your chances of getting a job in your field in the future. 

Sample responses to a counteroffer

Accepting the offer

Dear [NAME],

Thank you for your willingness to have a candid conversation regarding my future with [COMPANY]. I have decided to accept the terms you proposed in our conversation on [DATE]. 

To summarize, these include:

  • An increase in my salary from [CURRENT SALARY] to [NEW SALARY]
  • A change in my title from [CURRENT TITLE] to [NEW TITLE]
  • Added responsibilities, including [LIST RESPONSIBILITIES]

I’m pleased to remain on the [COMPANY] team and look forward to the opportunities ahead. 



Rejecting the offer

Dear [NAME],

Thank you for listening to my requests and proposing an offer to meet them. After careful consideration, I have decided to move forward with the opportunity I received from [OTHER COMPANY], which I feel is the right choice for my career at this time.

I wish you the best moving forward.