Quick answer: A counter offer is a better deal a current employer makes to keep an employee who has resigned, usually a raise, a promotion or a retention bonus. In India it often arrives during a long contractual notice period, after the candidate has signed your offer. No statute regulates it, so your protection lies in timing, pay and contract terms.
- No Indian law stops an employer from making a counter offer.
- Notice periods for managers and supervisors above ₹18,000 a month are set by contract, not by the IR Code.
- An exclusivity clause binding during employment can be enforced, but a post-exit non-compete is void under section 27 of the Indian Contract Act.
- A signed offer letter does not stop the candidate from accepting a counter offer.
Why are counter offers so common in India?
Time and bargaining power. Long notice periods give the current employer weeks to react.
Notice of 60 or 90 days is common in Indian tech contracts for mid and senior roles. That leaves a wide window between your signed offer and the joining date. Your offer letter becomes a price signal, and the candidate’s manager can use it to match or beat you.
Some candidates go further. Our own recruitment head has described candidates in Indian tech who accept one offer and keep interviewing, in a reality check on Indian job market commitment. Hence a counter offer from current employer sits behind many an offer dropout.
How do you protect a signed candidate from a counter offer?
Pay fairly at the start, then shorten the window. Five moves work best together.
- Benchmark first. A number set with salary benchmarking is harder to beat with a small raise.
- Ask early about the candidate’s notice period, and whether a buyout or early release is possible.
- Offer a joining bonus tied to an early start, so leaving sooner pays more than staying.
- Keep in touch every week until day one. Introduce the manager. Share the first project.
- Probe the reason for leaving. If it was only money, a counter will tempt them.
Some candidates accept the counter anyway. Accept that a few will. That said, the reasons people resign rarely vanish with a raise, so an exit interview at their old firm usually tells the same story a year later.
Can you sue a candidate who accepts a counter offer?
Rarely worth it. Under section 74 of the Indian Contract Act, you can claim only reasonable compensation, capped at any sum named, and recruiting costs are hard to prove as loss.
What changes when you hire through an EOR?
The offer comes from the EOR, but the counter still targets your candidate.
As the legal employer, the EOR issues the offer letter and the appointment letter. You set the pay and any joining bonus. So speed matters. A short gap between your verbal yes and a formal letter removes the doubt a counter offer feeds on.
How does Remunance help you beat a counter offer?
Remunance issues the offer and appointment letters from its own Indian entity. Onboarding can finish in as little as 2 working days from a signed contract, which leaves a counter offer less room. Our guide to international recruitment covers the wider offer stage. For live benchmarks before you name a figure, speak to our India hiring team.
What else do people ask about counter offers?
What is the counter offer meaning in HR?
It is a retention offer an employer makes after an employee resigns. It usually means more pay, a new title or a bonus to stay.
Should a candidate accept a counter offer?
That is the candidate’s call. Employers can make it less likely by paying fairly, keeping notice short and staying in contact until joining.
Is it legal to make a counter offer in India?
Yes. There is no legal bar. The employee must still honour or settle their contractual notice period with whichever employer they leave.