counter offers

We’re hearing more and more instances of candidates being offered more money or a better position when they tell their employer they have been offered a role with another organisation. Handling the counter offer is something hiring managers increasingly need to do.

It’s hard. You thought you had the person all set up to join your team. The contract was ready for their signature, but you get the call to say their manager had offered them a raise and/or a promotion to entice them to stay.

But you can make it less likely that the candidate will accept a counter offer. Here are some ways to deal with the situation.

The candidate’s present organisation will be enticing your would-be employee to stay with the promise of more money, a fancier title, or involvement in an interesting project. But that’s not all they will be weighing up; it’s also the security of staying in a familiar environment with familiar people, doing  job they have mastered. They may even feel guilty or disloyal for thinking of leaving. It’s human nature to feel this way.

You need to convince your would-be employee that moving is the right decision for them. These facts might help you persuade them to accept your offer.

• Once they have you have signalled their intention to leave, their loyalty will always be questioned, and future promotion may be jeopardised.
• Because most people who accept a counter offer leave within a year or less anyway, their manager is likely to be on the lookout for a replacement whether they stay or not.
• It is easier for the manager to entice the candidate to stay than to hire a new person, particularly in the middle of a project or when there are other vacancies in the team. When the crisis is over, the incentive to keep them on is gone.
• If the underlying reasons for their resignation have not been addressed, or if the changes have not been enough, they are likely to feel the need to leave in the not too distant future.

Stephen Crowe,  Managing Director of Challenge Consulting,  advises that during the recruitment process, you should try to find out precisely why the candidate is leaving their current job. ‘Discuss the possibility of a counter offer of more money with the candidate and reinforce that a counter offer won’t fix the underlying issues for them leaving,’ he says. If they are prepared for the possibility that there will be an attempt to ‘buy them back’ when they hand in their resignation, they are less likely to accept without thinking it through.

It also helps to make your first offer to the candidate your best offer, in terms of remuneration, opportunities, benefits and working conditions.  If there are non-monetary benefits from working with you, such as childcare facilities, a great location, the opportunity to work from home or an in-office barista, don’t forget to reinforce them to your candidates.

If you sense their only motivation is financial, or that they are using the threat of a new position to leverage a pay increase, you will be wise to weed them out in the early stages of the hiring process with a great structured interview process and psychometric testing. Keep the focus on what the candidate is looking forward to in the new role, and talk about it often. ‘You may even mention those things in the offer letter to the candidate,’ suggests Crowe.

Finally, it is worth remembering that if a candidate accepts a counter offer they have broken their commitment to the new employer who made the job offer. That is not only unprofessional, it is ethically questionable, and burns bridges. Their current company will question their loyalty, and they are likely to be first in line when staff is cut. The prospective company is unlikely to consider them again. Word gets around the industry.

Prepare the candidate for the counter offer by coaching them to say, ‘I’m flattered, but I’ve made my decision. At this point, this is the right decision for me. I’m happy to make the transition as smooth as possible for you, and let’s stay in touch.’