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HR glossary

What is a Counter Offer? Meaning and Example

A counter offer is a better package or role that an employer offers to keep an employee who has resigned or holds an offer from another company. It is usually a salary hike, promotion, retention bonus or change of team, made during the notice period. In salary talks, the term also means a candidate's reply asking for better terms.

How counter offers play out in India

An employee submits a resignation with a competitor's offer in hand. The reporting manager and HR meet them, ask why they are leaving and, if the person is worth keeping, propose a revised package. The employee compares it with the outside offer and sometimes goes back to the new employer to ask for more. If they accept the counter offer, the resignation is withdrawn in writing and the notice period stops. For the hiring company, this is one of the common reasons behind offer dropouts, especially where notice periods are long.

Should you make one?

A counter offer fixes pay, but people often leave for more than pay. If the real reasons are a difficult manager, no growth or burnout, a hike only delays the exit by a few months. It can also signal to others that resigning is the way to get a raise. Make a counter offer when the person is critical, the reason genuinely is pay or role, and you can fix it without breaking the salary band for their peers.

When you are the company hiring

Ask during the final interview what the candidate would do if their employer matched your offer. A candidate leaving for a bigger role, a new city or a stronger team is harder to pull back than one leaving only for money. Avoid a bidding war after acceptance. Raising your offer again to beat a counter offer starts the relationship on the wrong footing and can upset pay parity in the team the person joins.

Example: Harpreet Kaur, a senior accounts executive at a Ludhiana auto-parts firm, resigned on 3 August 2026 with an offer 25 percent above her pay. In the exit conversation her manager learned she was also unhappy about handling the month-end close alone. HR offered a 15 percent revision within her grade's salary band and approved hiring an accounts assistant to support her. Harpreet withdrew her resignation in writing on 7 August 2026, and the other company reopened its search.

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Frequently asked questions

What is a counter offer in a job?

A counter offer is a revised package, usually a salary hike, promotion or retention bonus, that your current employer makes after you resign or show them another offer, to persuade you to stay. The term is also used for a candidate's reply to a job offer asking for better terms during salary negotiation.

Is it a good idea to accept a counter offer?

It depends on why you wanted to leave. If the issue was only pay and the counter offer fixes it fairly, staying can work well. If you were leaving because of your manager, workload or lack of growth, more money does not change that, and you may be job hunting again within months. Decide on the full reasons, not only the figure.

How should HR handle a counter offer to a resigning employee?

Start with an honest conversation about why the employee is leaving. Make a counter offer only if the person is critical and the reason is something you can genuinely fix. Keep the revised pay within the salary band, record the resignation withdrawal and new terms in writing, and review the situation again after a few months.

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