Counteroffer (Counter Offer)

Definition

The term counteroffer refers to the response to a proposal that is deemed unacceptable.  A counteroffer then becomes a revision to the initial offer, providing each party additional time to negotiate what each believes is a fair proposal.

Explanation

Also referred to as a counter offer, the term counteroffer is frequently used in reference to a salary offered by an employer.  The counteroffer is made when the total compensation package presented is considered unacceptable by the job applicant.

While negotiations can occur in person or over the phone, candidates can also compose what is called a counter offer letter.  In this letter, the job applicant would restate their interest in the open position, but is asking the employer to reconsider their salary and benefits package.  Letters are the preferred form of communication if the job applicant is not skilled in negotiating.

The term counteroffer can also refer to a proposal made by an existing employer when an employee attempts to leave an organization.  For example, an employee may decide they are going to accept an offer of employment at another company.  In an attempt to retain the employee, their current employer may decide to provide a counteroffer; typically in the form of a raise in pay or a promotion.

If pay is the motivating factor for seeking another job, the employee may decide to accept the counteroffer and remain with their present employer.  However, individuals typically look for employment elsewhere when several aspects of their job are considered suboptimal or unsatisfactory.

Related Terms

base salarytotal compensation, incentive compensation, benefits, sales commission, job hopping, job offer letter, new job orientation