Counteroffers Part 2: The Good, The Bad, & The Ugly

6 mins read
Employer

It’s the moment that as a manager you dread; you get an email from a team member, asking if you have a minute to catch up. And that quick catch up requires a meeting room.

In such a tight candidate market, it makes sense to consider what you might do if someone in your team resigns, and whether or not it is pragmatic to try and retain that person at the point that they have already received another offer.

Retention, given the current climate, is naturally at the forefront of many Kiwi employer’s minds. If the employee is one you don’t want to lose, the last thing you want to be doing is heading to market to recruit a replacement.  This is when a counteroffer can be a tempting approach. However, while counteroffers can be effective, they shouldn’t be offered to everyone.

Because of the tight job market, we’ve seen an increase in counteroffers, and enquiries from our contacts keen to know how to handle this scenario.  I’ve been speaking with our teams about some of the situations we’re seeing, with the aim of comparing information amongst ourselves on how best to manage them, and how to support our candidates and clients through the offer process.  If you’re job hunting, you might want to check back and read last week’s post first.

Following is our advice for employers on both sides of the fence, as well as recruiters, on how to successfully navigate the counteroffer.

 

Advice for current employers

 

  • Make sure you have a reasonably clear idea on the true reasons for your employee’s resignation before you proceed. Counteroffering will not be successful, either straight away, or (worse) down the track – if the counteroffer is unable to address this. Monetary reasons tend to be the easiest to ‘fix’, whereas other issues may be less so.
  • Be realistic in understanding that most people don’t come to work just for the fun of it and if they won the lotto, you might not see them on Monday! Money is important. This doesn’t mean a money-motivated employee isn’t also committed, diligent, and worth trying to retain. If the barrier to staying on is a salary increase and you have it in your budgets to do so, don’t hesitate because of a negative view of an employee being mercenary, or greedy.
  • That said, creative, non-financial additions to your counteroffer can be very effective. Many employees are swayed by additional benefits that enhance their working experience, such as more flexibility, additional annual leave, the opportunity for development, a car park etc.
  • If you’re successful in counteroffering, ensure that you follow through with what was promised. These employees are the biggest flight risks in the months following the counteroffer, should they not see the benefits or changes that were promised from the offer.
  • Bump up communication for employees who have been successfully retained via a counteroffer process. Make sure you continue to check in on them regularly; we recommend categorising these employees in a way that means they receive a little more contact than normal, for three to six months (the risky period). In these catchups, focus on their on-going development, and have open conversations about their decision to stay
  • Be respectful in your dealings with the employee, even if the counteroffer is not successful. How you handle this will have a direct impact on your employment brand and reputation as a manager.

 

Advice for potential employers

 

If you are actively recruiting right now, it can be very frustrating when you think you have secured a great new employee, only for things to fall down at the offer stage.

  • Expect counter offers for strong candidates. Prepare for this; consider asking questions in the late stages of interviewing such as ‘What do you think your current employer will do when you resign?’ or be as direct as ‘Are you expecting a counteroffer?’
  • Present a strong offer, the first time. This isn’t the right market for low ball offers or expecting candidates to sustain interest in your organisation throughout a long negotiation process.
  • Decide in advance whether you would re-offer a candidate who has been counter-offered. This can be effective, but we recommend that this becomes your best and final offer (and communicate it in this way).
  • Be wary of a candidate who is happy to jump back and forth between counteroffers.

 

Advice for recruiters

 

As we’ve said to all other parties; make sure you are prepared and ready for counteroffers. It’s the reality of the current market!  Obviously as a recruiter it can be difficult because the very nature of counteroffering means someone is going to miss out, and that someone could be you. However it‘s still important to act in good faith.

  • Demonstrate your interest and expertise by being proactive. You should address the potential for counter offers with both the candidate, and potential new employer from the outset.
  • Be as objective as possible. The other parties will understand that you’ve got skin in the game, but everyone will be able to tell if you’re not being genuine.
  • As tough as it is, be prepared to support a candidate to take a counteroffer if it’s genuinely the best career move for them.
  • Make yourself the communication conduit. Your role is key – keeping all the parties updated.
  • Act with integrity. Chasing the dollar can be rewarding in the short term, but won’t help your reputation in the long run.

 

This candidate short market isn’t going to change anytime soon so it makes sense to consider and plan out your approach for dealing with job offers, and in particular counteroffers.

Of course, we’re here for you if you have questions, or need further advice. Don’t hesitate to pick up the phone and give us a call if you need help recruiting and managing offers in this tight candidate market.

Christian Brown
General Manager

A bit about me I started my career as a corporate lawyer in a large NZ private practice firm, before moving into the recruitment world in 2009. Since then, I have led numerous…

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