What is a bump offer?

A bump offer is a counteroffer made by an employer to an employee who has resigned or is planning to resign. The purpose of a bump offer is to persuade the employee to stay with the company by offering them better pay, benefits, responsibilities, or other incentives.

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When are Bump Offers Made?

Bump offers are usually made when an employer does not want to lose a valued employee. Common situations when bump offers may be extended include:

When a top performer submits their resignation

When an employee with critical skills or knowledge gives notice
When there is a shortage of talent and potential replacements are scarce
When it would be costly or detrimental to lose the employee

When the employee has received or is considering an offer from another company

By making a counteroffer, the employer is attempting to convince the employee to retract their resignation and stay.

What are the Components of a Bump Offer?

Bump offers will include enhanced compensation, benefits, perks, responsibilities, or other incentives tailored to the employee’s motivations for leaving. Common components of a bump offer may include:

Higher Salary – Increased base pay recognizes the employee’s value and may persuade them to stay.
Bonus – A special retention bonus may be offered to encourage the employee to remain.
Stock Options or Grants – Additional equity compensates the employee for their contributions.

Promotion – A title change or promotion expands the employee’s responsibilities.
Flexible Schedule – Accommodations like remote work or flex hours provide better work-life balance.
Professional Development – Access to training, mentoring, or other growth opportunities.

Expanded Benefits – Enhanced medical, dental, life insurance, or retirement benefits.
Additional PTO – Increased vacation time gives the employee more flexibility.

The bump offer will highlight the value the employer places on the individual contributor and provide incentives tailored to their specific situation.

How are Bump Offers Presented to Employees?

There are several best practices for effectively presenting a bump offer to an employee:

Make the offer quickly to prevent the employee from fully diving into their new opportunity search.
Communicate the offer in a meeting, not via email, to allow for an open conversation.

Emphasize how much the company values the employee and wants them to remain part of the team.
Be ready to explain the enhanced compensation, benefits, responsibilities, and rationale.
Ask what motivated the planned departure and customize the offer to those needs.

Provide written documentation of the offer details for the employee to review.
Express flexibility and willingness to find an offer that induces the employee to stay.
Set a deadline for accepting the offer to prevent delay.

Presenting a bump offer requires a balance of conveying the company’s enthusiasm for retaining the employee while also giving them space to thoughtfully consider the proposition.

What are the Benefits of Accepting a Bump Offer?

There are several potential benefits an employee may gain by accepting a bump offer, including:

Higher compensation – One of the main advantages is increased pay through raises, bonuses, equity, and improved benefits.

Career advancement – Promotions, expanded responsibilities, and development opportunities allow for professional growth.
Job security – Remaining in a known, stable work environment reduces uncertainty.
Work-life balance – Flexible schedules and remote work options provide more freedom.

Affirmation – The offer demonstrates the employee’s value and skills are appreciated.
Relationships – Long-tenured employees maintain their internal networks and working relationships.
Perks – Some bump offers include additional niceties like more time off.

Bump offers provide a chance for employees to improve their situation without the risks of changing jobs. It allows them to capitalize on their value to the company.

What are the Downsides of Accepting a Counteroffer?

There are also some potential risks or disadvantages associated with accepting a counteroffer, such as:

No long-term guarantees – While pay and benefits may improve initially, there are no assurances that upward career trajectory will continue long-term.

Morale issues – Co-workers may perceive preferential treatment generating resentment, accusations of favoritism, or friction.
Job security concerns – The risk of being targeted for layoffs may rise due to the perception of being overpaid.
Burned bridges – Accepting a counteroffer may damage relationships with new prospective employers.

Stifled advancement – Internal mobility may be limited if accepting an externally sourced offer.
Tension with leadership – Manager relationships may suffer if they feel manipulated or threatened.
Recurring issues – The same underlying reasons the employee wanted to leave may persist and resurface.

Employees should carefully weigh if the counteroffer fully addresses their motivations for leaving against the risks of staying before making a decision.

Should Employees Accept Bump Offers?

Whether accepting a bump offer is the right move depends on the individual employee’s situation. Some of the key factors to consider include:

If the counteroffer genuinely resolves your reasons for wanting to leave.

How the enhanced compensation and benefits compare to the new job’s package.
Growth opportunities with your current employer versus the new role.
How much you value stability and job security over career advancement.

Damage to external relationships if reneging on a resignation.
Disruption to your family situation from changing jobs.
How supportive management will be if you stay.

If a compromise can be reached like an extended transition period.

Employees should trust their instincts – if the reasons motivating your departure remain unaddressed, accepting a bump offer may only delay inevitable dissatisfaction. However, if you are highly valued and the counteroffer resolves your concerns, it may be an advantageous opportunity.

What Percentage of Employees Accept Counteroffers?

Industry research indicates that only a small percentage of employees offered bumps choose to remain with their employer:

According to a survey by staffing firm OfficeTeam, only 37% of senior managers making over $100,000 accepted a counteroffer when quitting.
An older study by employment research firm Lee Hecht Harrison found that more than 80% of employees who accepted counteroffers left their companies within six months anyway.
A PayScale survey found only 29% of respondents said counteroffers make them want to stay with their employer.

While data varies, most studies suggest that acceptance rates of counteroffers range between 20-40%. The majority of employees still choose to leave despite receiving a bump offer.

Why Don’t More Employees Accept Bump Offers?

There are several reasons why the majority of staff offered counterproposals still decide to leave, such as:

The underlying workplace, role, or cultural drivers causing unhappiness remain unfixed.

Not wanting to lose momentum after committing to a new employer.
Concerns about damaging external professional relationships.
Fear of being perceived negatively or becoming a layoff target.

Anxiety that the counteroffer may not represent a long-term solution.

Even attractive bump offers do not address fundamental sources of dissatisfaction. Employees ultimately prioritize career growth and advancement over short-term compensation increases in most cases.

Are Counteroffers a Good Recruitment Strategy?

Making bump offers is a common but controversial talent retention tactic. There are pros and cons companies should weigh:

Potential Benefits of Counteroffers

Retain employees with critical skills, knowledge, or experience.
Maintain productivity by avoiding vacancies and replacement hiring.
Prevent loss of institutional knowledge.

Save costs of recruiting, onboarding, and training new staff.
Address underlying issues making employees unhappy.
Provide additional time to find a replacement.

Potential Downsides of Counteroffers

If rejected, accelerates employee departure.
May be perceived as “buying employees” rather than fixing problems.
Introduces disparities in compensation.

Creates culture of entitlement or “bidding wars.”
Indicates poor succession planning and retention strategies.
Divert focus from strengthening recruitment pipelines.

Sets precedent employees can leverage threats to negotiate raises.

Companies should strategically analyze if the risks outweigh the benefits based on the timing, employee value, role criticality, and internal dynamics before extending bump offers.

Best Practices for Making Bump Offers

If electing to make a counteroffer, organizations should follow these best practices:

Act quickly to make the offer before the employee disengages.
Avoid reacting emotionally or taking negotiations personally.
Emphasize the employee’s value and how much you want them to stay.

Be sincere and only make offers if genuinely willing to modify circumstances to retain the employee.
Tailor the offer to the individual’s motivations – “one size fits all” offers tend to fail.
Watch for potential precedents or fairness issues you may inadvertently set.

Have the employee’s direct manager deliver the counterproposal.
Clearly communicate the enhanced compensation, benefits, responsibilities, etc. in writing.
Give the employee adequate but not unlimited time to consider the offer.

Focus on building long-term relationships and engagement, not just short-term incentives.

Strategic bump offers driven by positive intentions to retain valuable team members are more likely to succeed than desperate attempts to coerce employees into staying.

What are some Alternatives to Bump Offers?

Rather than reacting to resignations with counteroffers, proactive retention strategies are recommended. Some alternatives to explore include:

Conducting regular engagement, satisfaction, and exit surveys to identify problems early.
Building career development, advancement, and mobility opportunities.
Offering competitive compensation benchmarked to market rates.

Using performance management and recognition programs to reward top talent.
Providing learning and upskilling programs.
Focusing on diversity, inclusion, belonging, and company culture.

Allowing flexible work schedules and remote work arrangements.
Implementing stay interviews to understand what motivates employees.
Giving managers retention accountability and training.

Analyzing reasons for turnover and developing stabilization strategies.

While counteroffers have limited effectiveness, proactive engagement initiatives, career development, competitive pay, and flexible policies optimize retention.

Should You Accept a Bump Offer While Also Considering Other Jobs?

Employees negotiating multiple offers simultaneously should carefully evaluate their options before accepting any counterproposals. Key steps include:

Objectively compare pay, responsibilities, growth trajectory, and benefits with all roles under consideration.
Determine if the counteroffer resolves the underlying reasons you sought other jobs, especially related to long-term career advancement.
Consider which jobs align best with your skills, interests, values, and priorities.

Ask for deadline extensions if needed to thoroughly evaluate all choices.
Be transparent about having multiple offers to avoid rescinded offers if accepting then reneging later.
Evaluate the job stability, leadership, corporate cultures, and opportunities at both current and prospective employers.

Reflect on relationships and potential bridges burned if exiting after a short tenure.
Make an informed choice based on your career goals, lifestyle needs, and family situation.

Those playing the field with multiple opportunities should not accept counteroffers for solely short-term gains without weighing long-term impacts on career trajectories, skills development, and advancement potential.

Conclusion

When valued employees quit, organizations frequently resort to bump offers consisting of incentives aimed at retaining their talent. However, accepting counterproposals has risks. Employees must objectively evaluate if the offer resolves their underlying motivations for leaving or seek career growth elsewhere. Companies also face tradeoffs using reactive bonuses over proactive engagement initiatives. With careful consideration of individual situations and strategic implementation, bump offers can sometimes benefit both parties by keeping valuable workers employed.