How to Respond to a Counter Offer Letter

You know that feeling when you found the perfect person for an open job. You send an offer letter and then…here comes to the counter offer.

When it comes to the hiring process, salary negotiation and counter offers can be a bit tricky. Consider these tips and best practices for navigating this part of the hiring process.

What if we cannot afford to pay the proposed salary amount?

You found the ideal candidate, someone who checks all the boxes and more. Everything is going well…until you receive their counter offer. The requested salary is simply not within your budget to offer.

No need to despair. There are a couple of things you can offer to compensate and, hopefully, still onboard them in the end.

1. If you are not already doing so, consider offering benefits. Many job seekers place health insurance coverage at the top of the list when it comes to what they want from their career. Even paying a portion of the premiums can be an attractive incentive–and may help seal the deal in place of a bigger paycheck. 
2. Propose a milestone program. If a candidate accepts the position and is able to help increase productivity, perhaps it would be feasible to eventually increase their pay down the road.  Milestone pay increases can be especially beneficial to employers since they are designed to encourage a higher level of performance, as well as provide a way to project future growth. Establishing clear goals for employees helps them to encounter less discouragement or complacency, as they can see an end goal and reward.

What if we have to rescind our offer?

If it’s necessary to rescind an offer, keep in mind that it could be expose the company to liabilities or even legal action. If the candidate has not yet accepted the job offer, there is little-to-no risk in modifying the agreement or rescinding it completely. However, if the offer has been formally accepted, you should contact legal counsel before proceeding.

A sample counter offer letter

Dear Mr. White,

I am writing to inform you of our proposed changes to your terms, outlined in your counter offer. While I believe you are an ideal candidate for the position of Branch Manager, I am regrettably unable to meet your requested salary requirements. However, I would like to propose some suggestions that I believe will set you up for success.

I would like to offer a full benefits plan. This would include health, vision and dental coverage.

You may opt-in for coverage, which would be available to you immediately upon beginning your position.

In addition to this, I would like to offer an incentive plan. We will set up a strategic plan with milestones. As you progress in your position, we will agree upon salary increases along the way.

All other terms of your counter offer and our previous agreements will still be in effect.

Please provide a response at your earliest convenience.

Thank you.

Wrapping it up

Considering how long the hiring process can take, thinking through how to approach a counter offer saves time and frustration in the future.