Should You Counteroffer When Someone Resigns?

The resignation lands in your inbox at 9:14 on a Tuesday morning. Your first thought is probably not philosophical. It is practical. Who is going to do their job?

Then comes the calculation. How difficult are they to replace? How long will recruitment take? What knowledge are they taking with them? How much will it cost if they leave? And finally, the obvious question: What if we just offered them more money?

It sounds sensible. Often, it is not.

Counteroffers are one of the most tempting responses to an employee resignation because they offer an immediate solution to an immediate problem. The employee wants more money. You offer more money. They stay. Problem solved.

Except people rarely leave good jobs for one reason. Salary might be the final trigger, but underneath it could be a difficult manager, limited progression, boredom, too much work, too little flexibility or simply the feeling that they have been doing the same thing for too long.

A bigger salary does not necessarily make those things disappear. In fact, counteroffers can create an awkward question neither side particularly enjoys answering.

If the employee was worth an extra £10,000 yesterday, why did they have to resign before anyone offered it?

That does not automatically make the counteroffer wrong. Sometimes a resignation genuinely forces a business to reassess someone’s value. Salaries change. Markets move. A company may simply have underestimated what it would cost to replace an experienced employee.

But a rushed pay rise can also feel less like recognition and more like ransom. The employer is paying to avoid a problem. The employee is accepting money to postpone a decision. Neither is a particularly strong basis for a long-term relationship.

There is another problem. Once someone has resigned, something has changed. They have spent time looking elsewhere. They have attended interviews. They have imagined working for another company. They may already have decided to leave emotionally before putting anything in writing.

Money can delay that. It cannot necessarily reverse it.

This is why the first response to a resignation probably should not be, “What will it take to keep you?” It should be, “Why are you leaving?” And not the polite version designed to get everyone through the exit process. The real answer.

If someone says the salary is too low, find out whether that is actually the problem. If they say there is no progression, ask what progression they expected. If they want flexibility, determine whether the company can realistically provide it.

Sometimes the answer will be fixable. Sometimes it will not. That distinction matters because not every good employee should be persuaded to stay.

That sounds counterintuitive, particularly in a difficult hiring market, but occasionally leaving is the right decision for everyone. An employee has outgrown the role. The company cannot offer what they want next. Another opportunity genuinely suits them better.

Trying to prevent that with money can turn a clean departure into six unhappy months.

Of course, businesses also need to look at their own behaviour. If an employee resigns and the company immediately finds money for a substantial pay rise, it may have just exposed a problem. Why was that conversation not happening before?

Good businesses should not need a resignation letter to discover that an important employee is unhappy. Managers should know who is frustrated, who feels underpaid and who is quietly looking around.

Not because they can prevent every resignation. They cannot. People leave. They should.

But because the best time to understand why someone is unhappy is before they have accepted another job.

For employees, there is an equally uncomfortable question. If you have decided to resign, why would more money make you stay?

If the answer is genuinely, “I like everything about this job except the salary,” then a counteroffer might be perfectly sensible.

But if the job itself has become unbearable, £10,000 more may feel fantastic for approximately three weeks. Then it is still the same manager. The same workload. The same lack of progression. Just with slightly more money arriving in your bank account.

There is no universal rule that businesses should never counteroffer. Sometimes the right employee is worth fighting for. Sometimes the reasons for leaving can genuinely be addressed.

But counteroffers should be a decision, not a panic button. Because when someone resigns, the objective is not simply to stop them walking out of the door. It is to work out whether there is still a good reason for them to stay.

If there is, fix it. If there is not, letting someone leave may be the more honest decision.

Even when replacing them is going to be a pain in the arse.