COUNTEROFFERS - A GUIDE FOR CANDIDATES & EMPLOYERS
As a recruiting professional, I have always prided myself on drawing from real-life work experience in the workforce. Here is an example of what I experienced early in my career.
Before becoming an executive search consultant I had over 30 years with three Furniture companies. When I was in my mid 20’s and a rising executive with a Top 100 Furniture Retailer I felt like I was being overlooked and underappreciated given what I had accomplished. I had moved cross country for the company and turned around two troubled DC operations.
A clever recruiter called me one day and pitched me on a great opening at our leading competitor and the big hook was I wouldn’t even have to move. They booked me airfare to their Corporate HQ, took me to dinner and I interviewed with their corporate team. When I got back an offer letter was issued for a 20% increase in pay to switch teams and with a bump in the title too. I was really flattered but also really conflicted about what to do next.
When I presented my resignation notice, my current employer (my boss Rich) told me they would not be doing a counteroffer. He explained that counter offers in his opinion are not a good idea and rarely works out. He went on to explain that he would accept my resignation but he suggested to me that we could hit the pause button and hold it for a day. He would hold it on his desk and would not turn it in to our corporate headquarters until after we met again.
He carefully listened to my concerns and why I felt like I had to leave the company. He asked me to think things over for the next day or even two. He told me why he did not feel that this was a good time in my career to leave the company. He was honest and open and provided me with a great deal of insight.
But here is one of the key things he told me that day that gave me confidence that he was truly acting in my best interest. He told me that if I chose to leave I would have his blessing and support in terms of a reference in the future.
I spoke to my family and reviewed my decision and the reasons I was looking for in the first place. I realized I was being impulsive. I chose to stay with my current employer, not because I accepted a counteroffer. In fact, I didn’t receive any bump in salary at all. What my boss at the time did through the conversation he had with me was conduct what is now being called a “Stay Conversation” with me. It changed our relationship moving forward. In fact, he was more encouraging and he outlined a plan for me to train further for my next role. He told me his goal was to get me ready for his role and for advancement opportunities.
How did things turn out with my decision to stay?
I went on to serve 15 more years with the company and rose to the role of Vice President at our Corporate Headquarters. I have never regretted my decision to stay and turn down that other role and a big bump in pay.
Under most circumstances, it's not a great idea to accept a counteroffer. I agree with my former boss Rich, if you allow yourself to get into a bidding war and just throw more money at the employee you have only provided a bandaid or temporary fix. You have done nothing to get to the root cause.
FOR CANDIDATES
Accepting a counteroffer from your current employer may seem attractive, but it is usually not a good idea for these reasons:
Lack of Trust: Your current employer may feel hurt or betrayed by your desire to leave, and may question your commitment to the company going forward.
Temporary Solution: The raise or promotion offered in a counteroffer may only be a temporary solution to keep you from leaving. Your underlying issues with your current job may not be addressed, and you may still end up leaving in the future.
Damaged Reputation: Your coworkers and superiors may view you negatively for accepting a counteroffer, which can harm your professional reputation and future opportunities.
Financial Motivations: The primary motivation for an employer presenting a counteroffer is usually to save money, as it is often less expensive to retain an existing employee than to hire a new one. This can lead to resentment and a lack of genuine concern for your well-being or career growth.
Overall, accepting a counteroffer can create more problems than it solves, and it is often better to trust your initial instincts and move on to a new opportunity. So before you accept another role, think carefully and be ready to move forward.
Think about the damage to your reputation by accepting an offer for a new role and then going back to that company and to the HR executive or recruiter and saying…”my company offered me more money to stay”. It really says that you are not a serious person and instead of confronting a salary or compensation matter head on you chose to waste other people’s time.
FOR COMPANIES
If your employee is coming to you and tendering their resignation…from where I sit and what I see by estimate 90% of the time it's too late to save them. Any efforts you make will most likely just delay the inevitable.
My recommendation is to turn your energy towards getting the to root cause of the true reasons they are leaving. This is not the time to match the offer, or pull out the “oh we were just going to speak to you about the long overdue promotion”.
Tell them that you support them, do what my former boss Rich did and make sure they have thought the decision through. I do not recommend throwing money at the issue, it’s too late for that to be effective.
Ask them this one simple powerful question?
If they had the power to turn back the clock, what could the company have done differently to have kept them with the company?
This is one of the most important and powerful questions you can ask. You may find out what the real reasons are for turnover. Be open and ask them to speak without fear of reprisal in the future i.e., a bad reference. For example; you may find out it was a toxic boss, peer or co-worker, or maybe they felt they did not have a clear career path. Sometimes it’s just another job offer they had to jump over the desk for because it was too good to be true.
I hope you enjoyed this month’s topic. The above example was a true lifelong learning point in my career.
Please feel free to send me questions and comments on recruitment and talent acquisition.
Bill O’Malley is President of Connector Team Recruiting a firm headquartered in Charlottesville, Virginia specializing in the Furniture | Appliance and Sleep verticals. Connector Team is a full-service Search Firm offering permanent placement recruiting and interim staffing solutions.
Feel free to contact Bill at bill@connectorteamrecruiting.com.
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