Seven Steps To Respond to a Counter Offer Effectively

By Indeed Editorial Team

Published 20 July 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A counter offer is a salary package that a potential employer might offer you after hearing your salary expectations. It's an important step in the salary negotiation process as it helps both parties come to a sound compromise. Understanding the relevance of a counterproposal can ensure you get the compensation you deserve. In this article, we cover what a counter offer is, explain when recruiters make this suggestion, summarise its pros and cons and advice you on how to approach a counterproposal.

What is a counter offer?

During the final stages of the hiring process, a counter offer is a response given to you after you have stated your salary expectations. Typically, this is the salary package an employer is willing to offer you once they have considered your candidacy and their budget requirements. This offer can reveal their thoughts about your qualifications, skills and experience. If an employer presents you with a counterproposal, that's significantly lower than your expectations, it could be a red flag. Thus, it's important to weigh your options before making a new career move.

Related: How To Discuss Your Salary Expectations (With Example)

When do recruiters present counterproposals?

A recruiter's counterproposal speaks volumes about their current financial position and their impression of you. Thus, there are specific circumstances when a potential employer might present you with one. The following states some of these situations:

  • Strict budget requirements. Most of the time, recruiters present counterproposal to stay within their budget for the role. In this situation, it's important to show regard for the company's needs, too. This way, you can come across as a professional that can collaborate well with others.

  • Your salary expectations are too high. Before going into a salary negotiation, it's essential to do some research on the average salaries for your position in advance. If you skip this step, recruiters are more likely to present you with a counterproposal so that it aligns with the current job market.

  • A lack of interest in your job application. If a potential employer gives you an extremely low counterproposal, it could imply that they are more interested in saving money, rather than investing in your skills. If you find yourself in this situation, think about your job satisfaction in the long term. Make sure you aren't just their backup option.

Pros and cons of accepting a counterproposal

During the salary negotiation process, you need to understand the pros and cons of a counterproposal in order to come to a sound conclusion. The following gives you some thoughts to consider so that you can decide whether this would be a good move for you:

Is it good to accept a counterproposal?

The biggest advantage of considering a counterproposal is that it shows respect for the company's budget and thoughts about you. If it's a job that you really desire, it gives you an opportunity to demonstrate your work ethic and productivity. Once you are a proven asset to the organisation, negotiating a more lucrative salary package might become easier.

Accepting a counterproposal, especially one that's below your expectations, takes humility. However, companies that value their employers often make up for it in other ways, such as through other advancement opportunities or a pay increase at a later stage.

When are counterproposals not good?

Sometimes accepting a counterproposal may show a lack of self-worth, especially one that's extremely low. It can also decrease your sense of intrinsic motivation, a disadvantage that could reflect on your performance. If you commit to an offer that doesn't support your current lifestyle, this could also impact your feelings of empowerment and overall job satisfaction. The thought of feeling undervalued by your employer could leave you feeling resentful towards them. In the long-term, it could also influence the pay you get offered for future job opportunities. Thus, consider these disadvantages before accepting a counterproposal .

Related: How to Provide Your Expected Salary (With Tips and Examples)

Is a counterproposal a rejection of an offer?

Getting a job offer from a company alone is cause for celebration. Thus, try to be optimistic about a counterproposal. It's a milestone that demonstrates your potential. It shows that you have the ability to impress recruiters and succeed through the last stage of an interview. If you decide to reject a counterproposal, take it as a learning opportunity. Examine your achievements and mistakes so that you can revise your salary expectations or go into a salary negotiation with greater confidence.

Remember to not take a counterproposal too personally. Rather than viewing it as a rejection, try to understand the recruiter's perspective. Ask them questions about how they came to their final offer. Consider the organisation's current financial position and the overall global economic climate. If it's possible, try to negotiate a compromise that works for both parties involved.

Related: Write a Convincing Salary Increase Letter in Six Simple Steps

How to deal with a counterproposal

When a recruiter presents you with a counterproposal, it's best to remain calm. Give yourself time to think it over and prepare your answer. Remember, to analyse the salary offer from multiple standpoints. Try to be as professional as possible in your response to them. The following is a step-by-step guide on how to decide whether to accept or reject a counterproposal:

1. Analyse your initial reasons for leaving

Before accepting another job offer, rethink your decision to leave your current company. Determine whether your main reasoning was due to compensation matters or a genuine interest in seeking out a new challenge. If the counterproposal doesn't align with your salary goals, then you might opt to stick to your current role. However, if you decide this would be a better career move for you, accepting a lower offer might be more rewarding in the long term.

2. Evaluate how the counterproposal impacts your personal goals

Before accepting any salary offer, it's best to consider your living expenses. A job that affords you a decent quality of life ensures your basic needs are met. It promotes mental wellbeing, a characteristic that influences your work ethic, performance and motivation. When an employer offers you a living wage, it shows that they value their employees. It's a good barometer to predict your job satisfaction within the company.

3. Understand the employer's intentions

Determine your potential employer's goals with their counterproposal. Consider whether they want to save money or genuinely think that their offer matches your skills and experience. If you think you can renegotiate, understanding their perspective can help you build a solid argument. The most ideal situation is to find a compromise that all parties can work with.

4. Consider your personal happiness

There's more to a job than the salary you receive. If you see yourself feeling happy in this new position despite a low counterproposal, give it a chance. You can always renegotiate your salary package after you prove your worth to them. However, if this isn't the case, it's best to reject the counterproposal and continue applying for new jobs.

5. Make a list of pros and cons

Since considering a counterproposal basically means comparing a job offer with the improved terms of your current position, making a pros and cons list for both opportunities may help you make a decision. You may discover that some elements from your list, such as company culture, distance to work, future opportunities for promotion and others may appear on your pros on one list and cons on the other. Getting a snapshot of what both job opportunities can offer you may make it easier to decide.

6. Engage the employer in an open discussion

Deciding whether to accept a counterproposal influences your projected growth potential at both companies. By having an honest and open discussion with your supervisor, you can get a better idea of your value at your current job. Similarly, speak to your recruiter to understand the personal development opportunities in your new role. Comparing the feedback each side gives you can help you better understand your long-term job prospects.

7. Take your time

It may be a good idea to take a few days before making your final decision. This career step is likely to influence your long-term goals, so you need to make sure you have analysed every aspect of both offers before deciding on one. Try to visualise your future in both scenarios, consider every argument and stick to your decision.

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