A Counter Offer of Biblical Proportions

So imagine you are a recruiter who calls Facebook a really good client. You probably find it easy to get permission from your candidates to send their resumes in for review. You know that google is a great place to recruit from so that's where you recruit from.

I read on Techchrunch the other day that Google counter offered a staff level engineer there to the tune of $3.5 million dollars in restricted stock. The candidate accepted the counteroffer. I suppose most would in that situtation.

I don't know if this candidate was being represented by a recruiter or not but since this a network for recruiters, let's assume the candidate was being represented by a recruiter and now, that recruiter is out a fee. This counteroffer story makes a great story. Probably impossible to turn that candidate around.

Makes me want to spend the weekend thinking about the worst counteroffer experience I experienced as a recruiter. If you can quickly think of your worst victim story at the hands of a counteroffer, please share it. I bet there are some great ones out there.

Comment by pam claughton on November 13, 2010 at 11:42am: This scenario happened to a recruiter friend of mine and stands out as a counter-offer type situation that you just have no chance of overcoming. She had an offer of about 75k for an executive assistant to join a top client. The candidate was excited about the role, the company and very happy with the salary...until she heard from a former boss. When her references were checked this boss responded as many references do when asked 'would consider hiring this person again?' by being a little too enthusiastic, "I didn't know she was available, yes I would LOVE to work with her again, she's the best assistant I ever had."

So, he called her up and made her an offer she couldn't refuse, to join him at his new offices for a new venture, at almost double the salary, 137k base plus 20k signing bonus and additional perks like paying private school tuition for her child. She couldn't justify not taking this offer.

Comment by Sandra McCartt on November 13, 2010 at 12:02pm: Position: CFO
Company: Medium size O & G, E & P company going public.
Comp Package includling base, bonus and stock options 300K
Search took aprox 90 days, three candidates interviewed by CEO, COO, Board of Directors and a Sr. partner from the outside audit firm. Offer and negotiation of comp package took another 30 days, candidate accepted position, gave 30 days notice, started to work. 30% fee billed with a happy sigh.
Candidate was recruitable due to concerns about the CEO of his current company not willing to work with the financial group effectively. One week after the candidate started he received a call from the chairman of the board of his former company. In his exit interview he had been candid about his concerns with the CEO as to his reason for leaving. When the board of directors met the day after he left to start his new job they made the decision to fire the CEO and offer the position to my candidate. Talks had been underway but had not been shared with him. My candidate, the new CFO with my client , called to let me know he could not turn down the opportunity to return to his previous employer to take the position of CEO.
The belated buy back was significantly higher in base and bonus than his new position and offered not only the top spot but stock options over a million. The buy back was based on my candidate returning immediately. He did. When he called me he apologized of course then asked me what i would have done. All i could say was, "the same thing you are doing my friend."

I did ultimately fill the position but having a counter offer made and accepted after my candidate started to work was both a world class shock and will never be forgotten.
It's never over until the fat lady sings but on that one i thought i had given the bitch enough cookies that she had sung the last aria. Not so Maleneaux.

Comment by Katrina Fowler on November 15, 2010 at 10:12am: I work in an industry NOTORIOUS for this behavior. I have lost deals at the middle management level to BMW's, kid's tuition, stock, dream trips, ummm blackmail, and one executive to a $1M retention bonus!

Comment by Jason Monastra on November 15, 2010 at 10:20am: The stories over the years of counter offers for people not taking roles with our company are endless, but a few surface as immediate thoughts of "what the" moments. For one, we were adding a systems admin that had solid Solaris skills and had worked directly for SUN previous. We have him signed and accepted at 95k. SUN comes back after he turns in his resignation and offers him a 200k salary. He stayed put, however I was quick to let him know being the highest paid system admin in the world has its bad points - you will be the first to be fired when things go south.

But the funniest by far of all is the "panel counteroffer" which does not even involve pay. This company had it down and wow did it work the first time. Successfully pulling a candidate from the firm, they hand in their resignation. For one week straight, all the way from the direct manager, to their VP, CFO, CEO and President make walks down to her office telling her what she means to the company and how they want her to stay. She is so overwhelmed by their "appreciation" - she stays put. Well, we pulled another person from there however this time informed him of the "counteroffer process" the company employs giving him exact details of when they will come, what they will say and in what order they will arrive. The candidate called back several times throughout the week laughing at how ridiculous the process was knowing it in advance. It only made his decision to leave the firm easier.

Comment by Slouch on November 15, 2010 at 10:48am: Katrina, did you at least get a thank you from that executive?

Comment by Deborah J. Boyd on November 15, 2010 at 11:05am: Well I think we are in for more rather than less of this and was wondering if there was any way to collectively present a contract that is graduated. Fee pays 10%/week until 90 days is up. I am guessing that 90 days is average before collecting the fee. Am I dreaming?

Comment by Martin H.Snyder on November 15, 2010 at 11:28am: It seems like the right fee agreement could force somebody to pay in these odd ones where the counter comes after the new empl. starts.

Comment by Sandra McCartt on November 15, 2010 at 11:55am: On a retained search 2/3 of the fee would be paid after interview plus expenses but on a contingency search nobody is going to pay for something they don't get. Or at least they won't do it more than once. Guarantee is for full replacement at no additional charge for 90 days so if the check has not been mailed before the employee leaves, they won't mail it . They just say, replace him.

Comment by Navid Sabetian on November 15, 2010 at 5:06pm: The worst counter offer I have experienced is a candidate that was calling and emailing a few times a day after his last interview to see how he did and if there will be an offer. Naturally you "assume" this guy must be quite interested.

Once we sent him the letter of offer he did not respond any calls or emails. Upon my persistence I managed to get a hold of him on the phone a few days after and he made up a cock and bull story about having a homeloan and not being able to change his company because of that.

Obviously he was looking for a raise...

Now I run the candidate through counter offer scenario as often as I can and I tell them about the dangers of trying to get a raise through a counter offer.

In the end unpredictable nature of humans makes it impossible to completely eliminate the risk but you can do things to at least minimize it.

Comment by Charles Van Heerden on November 15, 2010 at 5:33pm: Counter offers are par for the course and I agree with Deborah that we should expect more defensive reaction by employers.
The best counteroffer I had seen was a high-flyer and potential CEO being poached by a bigger competitor for a Marketing Director's role. Within hours we had a meeting with the CEO and the Chairman, with a detailed fast-track plan (as result of good succession planning). In my view money is not the best way, but we offered him a promotion and more responsibility. For the company it was a blessing in disguise as we could accelerate his experience from Marketing to Sales. He stayed with the company for another three years until a merger and is today CEO of a company.
This is obviously seen from the corporate HR perspective an I am sure the search consultant will be telling a different story.
I liked Pam's story about the ex-boss - talk about timing!