Have you ever sourced the Best Candidate; sold them on the opportunity with your company or client; worked with them through the interview process, answering their questions; helped the hiring manager determine the best compensation package; extend the offer that they accepted; and then lost the candidate to a counter offer?  If you have been in the recruitment business for any amount of time, you have experienced that sinking feeling when they stop returning your calls.

 

When should a recruiter begin to prepare a candidate for the counter offer?  My suggestion is to bring up the topic when you are setting up the onsite interview.  Why?  You want them talking about it long before they experience the counter offer.  Why?  You don’t want them to experience the natural ego boost when they feel wanted, possibly for the first time in a long time at their current company.

 

A great way to bring up the topic is head on.  “How do you plan on handling the counter offer if my company/client extends you an offer that you accept?”  Hate to bring this up but some candidates use interviewing outside of their company as leverage to get a raise.  Obviously there is a lack of integrity, but they have been successful squeezing what they wanted out of a company using that tactic in the past.  It’s best to begin to coach them now – and the best way to begin coaching is to know their response to that question.

 

Now is the time to ask the following question again, “Why are you considering a job change now?”  Many times the response I’ve received is “You intrigued me.  Otherwise I was not looking.”  Then you may ask them, “What was it about this position that intrigued you?”  This response is very important to your success.  Write it down in your notes (all the better if you work with an applicant tracking system!).

While discussing the counter offer early on, I like to bring up the statistic that depending on the economy and industry between 67% and 80% of those employees who accept a counter offer leave in the next 6 months – and their company knows that statistic.

 

If that is true why do companies extend counter offers?  Typically to protect themselves.  The manager suddenly realizes they need that person that they have either been ignoring or have not allowed them to move to a new project, area, manager, etc.  They realize they will lose important knowledge that the person will take with them.  They may have lost other members of their team and are afraid how this departure will reflect on them.  Sometimes they suddenly realize they are under compensating their employee (but they still have a budget).

 

Fast forward to the offer.  Once the manager has decided to extend an offer, typically they have already begun penciling the candidate into meetings (even when the candidate has not accepted).  By now the candidate and I have had several conversations about the counter offer.  They are now expecting one.  Once the candidate accepts the offer, I ask them to let me know how many of the following statements they hear from various members of management:

 

1)    “I am shocked that you want to leave!  I thought you were happy.  As a matter of fact, tomorrow we were going to discuss a (promotion, raise, new project, etc.) with you.”  (Call me a cynic but the timing is suspect…”)

2)    “You are a very valuable employee.  We need to see what we can do to encourage you to stay.”

3)    “I am happy that you came to me because I planned to chat with you about moving to another organization/project within our company” (that was nixed in a previous conversation).

4)    “I am very disappointed that you chose such a busy time to leave our organization.  Can’t you see the impact of your departure will have on everyone else?”  (RecruiterGuy loves that one.  “The manager is trying to put a guilt trip on the employee!”)

5)    “Your manager just came to me to discuss your resignation.  I asked if I could talk with you.  You are a key person in our growth plans.  I am sorry we haven’t shared this with you sooner.  Let’s sit down and discuss the needed changes…”  (generally an executive speaking)

6)    “What will it take for you to stay?”  (At least that one is upfront in its intent!)

7)    “As you know, we rarely make counter offers here.  You are such a key person.  We will make an exception.  What do you want to stay?”

8)    “Thank you for coming to me and discussing needed changes.  Would you like to lead those changes?”  (Generally once you accept the counter offer, the desire to make the immediate changes in the organization dissolves shortly after)  Then they will say, “Let’s just finish what you are working on first.  Then we will discuss the changes.”  (Note – they won’t say “make the changes” again)

 

One of my candidates called me after their resignation and proudly told me the company hit 7 of the 8 statements during the day of his resignation.  Then he laughed and told me he was happy I warned him.

 

Why is accepting a counter offer typically one of the worse things an employee can do – and leads to so many leaving within the next 6 months?

  • The employee’s loyalty to their current company is now questioned.  Subtly they will begin to see changes in how management works with them if they accept the counter offer.  Fewer strategic conversations and more tactical conversations as they begin the brain drain.  Management also knows the employee will most likely leave in 6 months.  Therefore, management will begin to plan who is going to replace the employee.
  • Remember the odds of further success at that company decline rapidly once the employee accepts a counter offer. Management is now focused on “protecting themselves” instead of future contributions from the employee.  They know the employee will only be in the position a short time before they have to go through the expense and time of replacing them.
  • Usually accepting a counter offer will burn the bridge with the company where the employee successfully interviewed and received an offer.  Now the employee who was excited by the company, the new position, the hiring manager and the offer has to go to the offering company and give them the news they accepted a counter offer.  Generally that conversation does not go well.  Once a manager decides to extend an offer, they begin to plan for the new employee’s start and begin penciling them in for meetings.  They are very excited they have finally found the right person for the position.  Imagine the level of disappointment when they are told the candidate accepted a counter offer.

 

I recommend to candidates, “The best way to resign is to graciously thank the manager for the experience working with them.  Then firmly tell them that they are very excited about the new opportunity and give the date of their departure (generally 2 weeks’ notice).  When a manager approaches to discuss the counter offer, simply thank them and begin discussing the transition.”

 

By discussing the counter offer early and often during the recruiting process, you increase the probability of delivering your candidate to your company or client.

Views: 3194

Tags: compensation, counter, countering, offer, offers, recruitment, the

Comment by Lisa A, Doorly on January 26, 2012 at 10:17am

I see a lot more candidates using the offer as leverage to get more money from their current employer- basically wasting everyone's time.  What is most damaging is the unlikelihood I would ever reach out to that candidate again for a potential opportunity. 

Comment by Bill Humbert on January 26, 2012 at 11:15am

Lisa,  Exactly true.  Also they burned that bridge with that hiring manager - and you never know where they will show up next!

Comment by Kim Frost on January 26, 2012 at 11:45am

Very well written article, thank you.

Comment by corry prohens on January 26, 2012 at 12:02pm

Good job Bill.  This is a very thorough view of the issue.  I have read lots of posts about counter offers and unfortunately I have been through this conversation several dozen times.  I have come to the conclusion that there is really nothing you can do to prevent counter offers and little you can do to reverse them.  

If a candidate is using you and your client to get a raise or promotion in their current role, then they are going to play that out regardless of your efforts.  Yes, they will burn bridges with everyone involved.  Yes, it is damaging to their career and their reputation in the long run.  But it is human nature (for some people).  

I usually just get on record with the statistics and rationale that you mentioned above, but I have so much invested in their decision that it is meaningless coming from me.  

The reality is that a small percentage of your deals every year are going to fall to counter offers.  Build it into your model - there is nothing you can do about it.  As long as people are your products things like this will happen.  

Comment by Kyle Schafroth on January 26, 2012 at 1:18pm

Great article Bill! A sad reality of the business but all the more important to think about ahead of time considering the impact it has on the companies involved and most importantly the candidate him/herself.

Comment by April on January 26, 2012 at 1:43pm

This is a great article, thank you.It's important to ask or remind the candidate why they were looking for a new job in the first place.

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