How to Respond to a Counter-Offer: Tips, Tricks, and Suggestions

A counter-offer is a proposal in response to one given during job negotiations. Proposing counter-offers is quickly becoming standard practice in the job negotiation process. The power balance between employee and employer has shifted in favor of the former, as employees have realized the value of their time and services can be seriously leveraged. Candidates may propose counter-offers for a plethora of situations, including negotiating salary, job position, benefits, or specifics of a compensation package. 

Responding to a counteroffer can be challenging even for the most experienced recruiter or hiring manager. Responding to counter offers should be done tactfully, and handled per basis. When recruiters respond to counter offers in a manner that is most efficient and beneficial, they must be aware of the situation the candidate has presented (i.e. their salary range, experience, skills, etc.) and decide whether they are worth the responded counteroffer that they have proposed.

Are you trying to figure out the best way to respond to a counteroffer? This article will discuss everything you need to know about responding to counteroffers and will give you tips and tricks on how to respond to a counteroffer in every situation!

A candidate counteroffer is a proposal for a different (usually higher) compensation package than one previously offered. 

Reasons that a candidate may respond with a counteroffer include:

1. A higher salary:
This is the most common reason a candidate will respond with a counteroffer. Typically, candidates believe they are worth more than the original salary and will request higher pay. 

2. More vacation days:
Time off from work is heavily negotiated. Adding or increasing paid vacation days is a common feature included in counteroffers.

3. More benefits:
This broadly includes any extraneous benefits such as a parking space, a personal office, an assistant, etc.

4. Working location: Remote work is quickly gaining popularity. A strong reason for renegotiation is that candidates want the option to work partially from home.

5. Title or position: The title of a position can greatly impact progression and salary, both within your company and outside of it. Candidates may negotiate for a more attractive position if they feel like their talents are better suited to that position.

A counteroffer from a candidate indicates that they feel as though they are worth more than your original proposal. It could also mean that your salary range is below the industry standard in your area. Whatever the reason is, if you notice a pattern of candidates proposing counter offers to your job opening, it may be time to reconsider the salary and benefits you propose from the get-go.

So, the candidate has responded with a counteroffer; what now? This section will highlight all the details you should consider before responding to a counteroffer.

Research the industry/position’s salary data

A good way to determine whether the proposed counteroffer is reasonable is to find out the industry standard for the position in your area. Research and fact-check the salary range for comparable salaries in your city or state, and determine whether or not the counteroffer response is within this range. Remember to also consider the experience level, qualifications, and skills that the candidate brings to the table as well. A candidate may respond with a counteroffer higher than the industry standard, but may also be highly qualified and experienced!

Review your budget

An important feature to consider in your counter offer response is the budget of the company. Before responding to the counteroffer, determine whether the company can even afford the candidate’s proposal!

Consider other team members

Salary and benefits are reflective of an employee's qualifications and tenure. Your counter offer response should greatly factor in the salaries and positions of other team members, especially those in the same or comparable roles. If you respond to a counteroffer with a salary much higher than others, it may create problems in the future!

Weigh your options

Before sending a counteroffer response, take some time to seriously reflect whether or not accepting this higher deal is worth it. After all, other applicants are more than happy to work for the salary that you have proposed. Figure out whether this candidate is worth the money they are asking for!

Decide on how you want to respond

You’ve now decided how you want to respond to the counteroffer! Awesome! There are 3 ways this situation can happen. In every case, your counteroffer response should be clear and leave no room for misinterpretation. When responding to a counteroffer, you can:

• Accept the counter-offer response
• Decline the counter-offer response
• Initiate a new round of negotiations

When responding to and accepting a candidate’s counteroffer, you should clearly state your intention and welcome them to the team. Here are some things to remember when responding to a counteroffer with an acceptance!

Be positive, professional & enthusiastic

When accepting a counteroffer, the tone of your response should be positive yet professional. Show the candidate that the company is thrilled to have them! Your counteroffer response should enthusiastically indicate that all their requests have been met and approved.

Show excitement for them to join your company

Your counteroffer response should briefly include a statement showing excitement for the candidate joining the company. Employees should feel welcome and appreciated at their place of work, at all times. This is the start of their time with you and the company, so make a good first impression through your counter offer response! 

Restate the final offer in detail

When accepting a counteroffer, your response should clearly state the final accepted terms of your arrangement. This provides documented evidence of your communication and clarifies any misconceptions that could arise in the future. 

Remind them to confirm their acceptance with a reply ASAP

People are busy, so it may slip their minds to confirm that their counteroffer has been responded to and accepted. At the end of your counteroffer response, gently remind them to follow up with a confirmation email as soon as possible. This not only indicates their continued interest but also ensures that you do not begin considering other candidates. 

Here is a sample email of accepting a counteroffer response. 

When declining a candidate’s counteroffer, there are important things that must be mentioned in your counteroffer response. 

Remain professional & show regret

The tone of your counteroffer response should be professional at all times. Respectfully and regretfully indicate that the candidate’s counteroffer was declined. 

Explain that the current offer is all you can provide

Provide a reason for your counteroffer response. The most neutral way to do this is to indicate that your counteroffer response is reflective of the financial restraints of the company and that the current offer is all that you can provide. 

Reemphasize why you think they should still accept the offer

Remember that the candidate made it this far in the job application process, which means that they must be of value and interest to the company. To still secure the talent that the candidate provides, your counteroffer response should indicate that they should still consider and accept the original offer. This counteroffer response shows that you are still considering the candidate for the position and can make them reevaluate their position on the counteroffer they proposed. 

Thank them for the time spent & interest in the company and position

Wrap up your counteroffer response by thanking the candidate for their time and interest in your company. You can also include well wishes in the final words of your counteroffer response letter!

Here is a sample email of declining a counteroffer response.

If you and the company have decided that there is still further room for negotiation, you can respond to the candidate’s counteroffer by proposing further negotiations. Here are the things to consider when reopening negotiations in response to a candidate’s counteroffer.

Consider fulfilling the counter-offer after a probationary period

A good way to come to a satisfactory arrangement between the candidate and the company is to propose accepting the counteroffer after a probationary period. During this period, the candidate can prove that they are worth the amount that they are proposing and, if not, will stay with the original salary. Your counteroffer response should indicate this intention, should you decide to go down this path. 

Consider offering other non-salary benefits

Sweeten the original deal by offering non-salary benefits in your counteroffer response. These benefits can compensate for the difference in salary that the candidate is proposing in their counteroffer. Your response should indicate the type and quantity of non-salary benefits you are willing to offer. Some benefits you can include in a counteroffer response are:

• Vacation days
• Signing/yearly bonuses
• Paid leave
• Relocation financing
• Insurance
• Pension

Offer adding bonuses and commissions instead

In your counter offer response letter, A great way to provide a pay bump without increasing a candidate’s base salary is to offer bonuses and commissions based on work. While the latter highly depends on the line of work (i.e. sales/marketing), the former can be applied as a yearly bonus or signing bonus. In either case, your counter offer response should clearly delineate any offer you make in this regard. 

Here is a sample email of a counteroffer response that includes adjustments to the first offer.

If a candidate rejects your counter offer response, try to find out why based on the information they have provided in their response. Perhaps they have indicated that they were only interested in a salary raise, and did not care much for paid leave or a signing bonus. Take a record of the information and consider trends that emerge for future negotiations!

Responding to a counteroffer is not an easy task, and should be handled with due care and respect. Counteroffer responses should be professional and should be written with consideration to the situation. Your counteroffer response should also always clearly indicate your position so that there is nothing to be left up to interpretation. Here are some key takeaways to take into consideration when responding to a counteroffer: 

• When accepting a counteroffer, professionally and enthusiastically indicate the offer’s acceptance and indicate your delight in extending a final invitation to the company
• When declining a counteroffer, your response should be regretful in tone and clearly indicate that the counteroffer has been declined.
• If you would like to reopen negotiations with the candidate, your counteroffer response should clearly indicate the original AND renegotiated points. 

--- Originally written by Alexander Coye ---