A counter-offer is a response that proposes different terms to an offer already on the table. It happens in two directions during hiring: a candidate may counter a job offer asking for better pay or terms, or an employee who has resigned may receive a counter-offer from their current employer trying to keep them.
What it means
A counter-offer from a current employer is essentially an emergency retention move, often surfacing a pay gap that should have been addressed earlier through salary benchmarking rather than reactively at resignation.
Where it fits in
If a counter-offer succeeds in either direction, it changes the pay figure that ultimately flows into payroll - either a new hire's adjusted package before they even start, or an existing employee's revised pay if they withdraw a resignation.
Key rules
- A revised set of terms proposed in response to an existing offer.
- Can come from a candidate negotiating, or an employer retaining a resignee.
- Retention counter-offers often expose a pay gap missed by benchmarking.
- Either direction changes the pay figure payroll ultimately processes.
