A Guide to Helping your Potential New Hire through a Counteroffer
Congratulations. You have worked hard on an exceptional hire — spending months to find just the right person. You made the job offer and the candidate said “yes.” Unfortunately, this is not the time to relax – your work is not done.
Today, with unemployment in Accounting and Finance near 0%, the counteroffer is back in vogue – companies are doing whatever they can to hold on to their talent. In over 90% of the jobs we have managed in the past 6 months, currently employed candidates have received a counteroffer. In all but a few cases, substantial money and incentives were put on the table.
With that in mind, here are a few things to keep in mind as you and your candidate negotiate the waters of the counteroffer.
Change is hard.
Remember — switching jobs is scary. Research tells us that the top three life stressors are: 1) death of a spouse, 2) divorce, and 3) changing jobs. So, don’t take the impact of a job change lightly – your candidate will feel stress. Help your transitioning employee recognize the difficulty of a job change.
At Accountants One we combat fear of change by constantly reminding candidates that they are going to have a “freak out moment.” We tell them stories of candidates moving through a job change who wake up covered in sweat on the verge of a panic attack. We help them to understand that this is completely normal.
We coach our candidates in the midst of a job transition to combat the fear of change by focusing on the big picture. Here are some of the questions we ask:
Why were you looking in the first place? Are any of the things that prompted you to look originally likely to change if you stayed? How much will your skill set be worth 3-5 years from now once you’ve added this new set of skills to your resume? Is it fear of the “new” that’s causing you to hesitate, or is there something tangible that is causing you to move forward?
We find that focusing on the bigger picture helps candidates in a job change to relax and move through the difficulty of facing the unknown.
Have a counteroffer strategy – your competition has one.
Here is how it goes. You offer your candidate a job. They are excited, and turn in a two week notice to their manager. Recognizing that losing this person and their talents is not ideal, the counteroffer strategy begins:
“Congrats on your new job. We will miss you. You have been great. Let’s stay really positive and announce this in the staff meeting next week. In the meantime, keep this confidential please. I really am happy for you, but let’s make this announcement together. OK?”
Sounds reasonable right? The manager and resigning employee agree. And the moment the resigning employee leaves the office the manager calls the executive team.
Recognizing that timing is poor for losing talent, the big guns are called in. Here is the typical next step phone call coming from someone in the C-Suite…
“Hello. Just got the news. So sorry to hear it. We are going to miss you, but before we let everyone know, how about dinner tonight?”
At that dinner the exiting employee hears about all the wonderful plans that were in store for him or her. They hear about the promotion right around the corner – new role / new responsibilities. They hear about the new bonus structure. They hear about the new office and the lap top.
And then the topic of the new offer comes up. “What if we not only matched your current offer, and increased the salary 20%?”
Remember, this candidate is already almost certainly facing fear of change, and now here comes special attention and more money! Hard to resist the temptation.
To counter this strategy you prepare your candidate by letting them know ahead of time what is going to happen. You will be amazed how many candidates will tell you that this EXACT scenario unfolds in front of them. By helping them to understand that it is a strategy (almost certainly NOT in their best interest) you considerably raise the odds of having your new employee turn in a notice to join your team!
Help the candidate to understand that in almost every case taking a counteroffer is not a good idea.
Anne was unhappy with her job. She had great ideas that were not being considered by her current “if it ain’t broke don’t fix it” boss. She interviewed at an innovative company with a high energy manger and accepted a very fair offer.
Her current employer offered her a counteroffer – a sweet pay increase AND the opportunity to implement many of her new ideas. Anne took the counteroffer. Six months later she was no longer there!
According to our statistics, this happens 80% of the time. There are two main reasons that counteroffers don’t last.
First, most of the time a counteroffer is offered because the timing is not good for the company. The strategy is a short-term fix until the company can find a replacement on their terms. Loyalty has been breached and the counter is just a way to keep the employee around until a proper replacement can be found.
Second, the problem that was driving the candidate away almost never REALLY changes. In Anne’s case, the promise to let her innovate didn’t really come to fruition. The culture of the organization was the culprit and she remained frustrated and underused.
How much better it would have been for Anne to remember the reasons for looking for a new job? To resist the temptation of more money. To resist the temptation of sticking with the “devil she knew.” To stick with her initial decision.
So, how do you as an employer help your candidates to see this? At Accountants One we encourage our candidates to Google “counteroffers.” Five minutes of independent research usually seals the deal. There exists a multitude of solid research showing that counteroffers are a bad idea.
Inevitably, dealing with counteroffers in today’s market is a reality. There is no way to bat 1000 in this world but through three key areas of focus you will substantially increase your odds of moving your potential candidates through the counteroffer. Those three strategies are: help your prospective candidates recognize that change is hard, walk your candidates through counteroffer techniques, and objectively help your candidates realize that taking a counteroffer is almost never a good idea. If you utilize these strategies, and keep a level head, the choppy waters of the counter offer can be navigated with relative ease.