Accepting counteroffers can create several significant organizational disadvantages, particularly internal pay inequity (A), short-term retention risk (E), and negative precedent-setting (F).
Counteroffers often involve off-cycle pay increases or special incentives that disrupt established pay structures, leading to perceptions of unfairness. This undermines internal equity and trust. Additionally, research and SPHR best practice consistently show that many employees who accept counteroffers leave within six to twelve months, often because underlying issues prompting the resignation were not fully resolved.
Offering counteroffers may also encourage other employees to resign strategically in order to secure pay increases, damaging morale and retention. This behavior weakens performance management discipline and reward credibility.
Budget constraints (B) and performance philosophy (C) are considerations but not inherent disadvantages. Impact on diversity (D) is not a typical consequence. Limiting development opportunities (G) may occur in some cases but is less direct than the primary risks listed above.
SPHR exam content emphasizes that counteroffers should be used sparingly and strategically due to their long-term cultural and equity implications.
References :
HRCI SPHR Exam Content Outline — Functional Area: Employee Relations and Engagement (retention strategies; compensation equity).
HRCI SPHR Study Guide — Risks and implications of counteroffers.
