28 Jun What an Employer Should Know About Counteroffers
Your recruiting process is done, or so you think. Your first-choice candidate has accepted your offer. You heard the excitement in their voice when you let them know that you want them to join your team. However now, just a few days later, your candidate is receiving a counteroffer from their current employer: at a higher salary, better package or with a promotion.
Staff retention is a hot topic on most organizations’ agendas especially as we go through The Great Resignation. A counteroffer is often the last-ditch attempt to hang on to their top talent, something we’ve seen a significant increase in over the last few months as employers attempt to ‘buy back’ their staff.
As the potential new employer this is frustrating, time wasting, extremely annoying and not only leaves you with a continuing gap on your team, but also leaves you feeling slightly used. To help avoid this situation we have identified seven ideas on dealing with counteroffers:
1. Offer a great candidate experience
First and foremost, ensure you offer the greatest recruitment experience to the candidate as possible. Your opportunity needs to be as appealing, exciting and unbeatable as you can make it. You want the candidate to be convinced that this opportunity is the best one out there for them and that you would be the best person to work with and for. No matter the salary offered!
2. Determine the reasons for leaving
Understanding a candidate’s motivation for changing jobs will provide some insight into the potential counteroffer risk. If a candidate indicates the primary motivation is money, or something that the current employer can address and make better, the risk will clearly be higher. Similarly, you want to understand how committed your candidate is to leaving their current employer. If you have two equally promising candidates but one has more conviction, you might favor one over the other. Equally as important, understanding that you have a less committed candidate may assist in designing an offer that is more resistant to a counteroffer.
3. Understand compensation expectations
Do your market research to find out what a reasonable compensation package is for the role you’re advertising, particularly in comparison to competing companies in your industry and area. To maintain a candidate’s interest, you need to offer them an attractive compensation package. Money matters for sure but consider tangible and intangible benefits, like opportunities to work from home and training.
4. Cover counteroffers at interview
While it’s best to wait until the latter stages of the recruitment process, you want to address the potential of a counteroffer. Be direct. Understand the reasons for leaving their current employer and how they may react when they hand in their notice. Not only will this provide insight into the candidate, but you’ll also have a great understanding of their willingness to fully commit to a new opportunity, or if there’s something that could tempt them to stay. Number 7 below also addresses this and you may be more comfortable going that route. Counteroffers can also catch candidates by surprise leaving them susceptible to persuasion to remain with their current employer. Help them to understand why they are leaving and why your opportunity is better.
5. Offer the opportunity for further meetings
When you make the offer, or as it’s being considered, invite them in again to meet with their peers and management team. Candidates accept positions in large part because of the people they meet. This also provides an opportunity for you to address any concerns raised with open feedback and practical examples. You also want to encourage them to call you right after they have resigned. This is the time when the candidate is most vulnerable to a counteroffer so engage with them to show that your organization is engaged and excitedly anticipating their start date.
6. Keep the candidate moving forward
Taking this further, you’ve made an offer and they accepted! In The Great Resignation era you need to stay in contact with your new hire until they join you on their first day. Keep your candidate focused on the future and working for you. Add them to your company mailing list, invite them to social events, Schedule a welcome lunch, and engage them in onboarding soon after they accept your offer. Have as many people as possible contact them. Invite them to spend time in the office before their official start date. This will help to integrate them into your company culture and hopefully encourage them to feel more committed to your company. By keeping in touch and discovering how their boss took their resignation will allow you to have input into any counteroffer situation.
7. Use a recruiter
A good recruiter will understand their candidate’s job search motivations before introducing them to a potential new employer. You don’t want to waste your time if the candidate’s primary goal is to use your offer as a bargaining tool for a higher salary where they are now. They will also prepare your candidate for the possibility of a counteroffer. You want to work with someone who is there throughout the entire process, from the initial understanding of the role to the offer being made and accepted, to the time when your new hire is settled into their new company months after they start.
Each new hire is different and each counter-offer situation even more so. With The Great Resignation and the current climate where employers are struggling to hire and retain critical game changers, it is no surprise to see more and more aggressive counteroffer strategies being utilized. Counteroffers from current employers are proving to be a bigger danger than offers from other new opportunities. Limit those risks and call The CFO Suite!