Handling Counteroffers: How Startups Can Win Talent Wars

# Handling Counteroffers: How Startups Can Win Talent Wars

You've found a great candidate, run a strong process, and extended an offer. Then their current employer counteroffers. Here's how to navigate this common scenario.

Understanding Counteroffers

### Why They Happen - Replacement cost is high - Manager doesn't want to lose a good performer - Company has budget flexibility - Retention is cheaper than recruiting

### The Statistics - 50-80% of people who accept counteroffers leave within 6-12 months anyway - Underlying reasons for leaving usually aren't addressed - Relationship with employer is often damaged

Prevention Is Better Than Cure

### During the Process - Understand why they're looking (deeply) - Ask what would make them stay - Gauge likelihood of counteroffer - Build genuine excitement for the opportunity

### Before the Offer - Discuss timeline and decision process - Understand their priorities beyond compensation - Surface any potential obstacles - Create genuine urgency without pressure

When a Counteroffer Comes

### Don't Panic - This is normal and expected - It often means you have a great candidate - You still have a real chance

### Respond Thoughtfully

**Step 1: Acknowledge** "I understand you received a counter. That's flattering. Let's talk through how you're thinking about it."

**Step 2: Explore** - What specifically did they offer? - How does it change things for you? - What were your original reasons for looking? - Does this address those reasons?

**Step 3: Reframe** - Remind them of the opportunity with you - Discuss what won't change at their current company - Talk about long-term trajectory - Be honest about what you can and can't match

### What You Can Do

**Match strategically** - Consider matching cash if it's close - Emphasize equity upside - Highlight non-monetary benefits - Don't get into bidding war you can't win

**Sell harder** - Founder conversation about the mission - Team member calls to build connection - Customer references on impact - Board member involvement for senior roles

**Create urgency** - Deadline (reasonable, not artificial) - Other candidates in process - Timing of projects they'd work on

When to Walk Away

### Signs It's Over - They're using you for leverage (and admit it) - They've already decided but haven't told you - Match would require unreasonable stretch - Red flags about commitment

### Graceful Exit "I understand this is a tough decision. We'd love to have you, but if staying is the right choice for you, we respect that. The door is open if things change."

The Bottom Line

Counteroffers are a normal part of hiring. The best defense is a strong offense—build genuine excitement throughout the process, understand motivations deeply, and make the case for why your opportunity is better for their career, not just competitive on paper.