Counter-Offers, And Why They Are Baaad, Very Bad!

Recently, a candidate approached me to help him find a new job. The company that he was currently working for was cutting back his responsibility level and his take-home pay was dwindling. The candidate, “Bob”, knew that the company was in bad financial health.

I liked Bob. Thought he was a great candidate to market. So, I worked on his resume, tweaking it to perfection. Coached him on interviewing. And once he was all polished and ready for presenting, I began marketing him to some hiring authorities. Got a hit! A client company was looking to hire and was very interested in Bob’s qualifications. My client was very thankful that I called them about Bob’s candidacy and the first interview was scheduled, lickety-split. After three interviews completed, Bob was given a super offer. How smooth was that? Wait. There’s more!!

Bob called me the next morning. He declined the offer. What the heck? You got it. DECLINED. And here is why:

The failing company that Bob felt strongly was going close operations any day, came back to Bob with a counter-offer. The offer was, in Bob’s words, “Too good to be true.” Tripled his salary, plus a cash bonus of $5k. Bob drank the Kool-aide and accepted the deal. When I asked Bob the most obvious question, “Where did they get all of this money to pay you that salary, not to mention the bonus?” He replied, “They re-worked some of the numbers and *snap* found they could pay me more.” The snap sound was my neck popping.

Lesson learned: I should have prepared for this on day one. Alas, my failure to do so really cost my client a lot of time and effort. I am disappointed in myself, but ready to make it right with my client. Already I have sourced two candidates for the position Bob declined to accept. All better.

Here’s what I know: This is the last time I will make that mistake. Going forward, here is what I want you to know:

1). Before you resign from your current position, arm yourself with reality. Remind yourself of all the reasons why you were looking for a job in the first place. Lofty promises and cash thrown at you will never change the fact that the reason you were looking to change jobs still exists. And,

2). Your employer now sees you as a disloyal member of the team. You lost any at-a-boys collected with past achievements because you looked for a job on company time. You focused your time and energy on interviewing while being paid to work. Traitor! You are scum. And, more importantly

3). However long it takes your current boss to find your replacement is how ever long you have left at the company. That is a promise. You are no longer in control of your career destiny.

Bottom line, counter-offers are 95% empty attempts to “band-aide” the situation. You are being bribed to stay. And by staying, you provide the company plenty of time to find your replacement. Trust me, they will use the time wisely and probably will find a BETTER you. Then you, dahling, will be summarily fired without that sweet two-week notice you were prepared to give.

If you are that concerned about taking the counter, ask yourself this, “Why didn’t you get that kinda cash/promise before looking for another job?”

Maybe I will post again when Bob calls me saying that the “too-good-to-be-true” counter-offer was just that…too good to be true. Maybe not. I need to move on. *smile*

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Comment by Bill Schultz on October 14, 2011 at 2:44pm: Good honesty, SeSee. It happens to all of us.

It's tough to sell against the status quo. They will hear you but not listen. What you said about preparing for this on day one is true. After hearing his current company is about to go bust, I don't know how much I would've pressed either.

I have a resignation package that I send to every candidate who accepts an offer (regardless of how much they tell me there's no way they will get a counter). It shows them how to give notice and control the process. Most of all, it gives them conviction to see it through. I'd gladly share it with anyone who wants.

Comment by Paul S. Gumbinner on October 17, 2011 at 9:53am: I once saw a statistic that 80% of the candidates who accept counter offers are gone within two years. Counter offers are genuinely for the convenience of the company, not the candidate. Most counter offers are simply to meet the offer; we all know that is not a real counter offer. A count er offer is when the company admits that they have undervalued the candidate and offer more. In the case of your candidate, whatever the reason, tripling salary is a real counter offer and I am sure is more than you were able to get him. I published an article about this in AdWeek Magazine last year. http://www.adweek.com/news/advertising-branding/do-you-stay-or-go-1... However, don't worry, your candidate will be back to you in very short order.

Comment by Melissa Zentgraf on October 17, 2011 at 10:00am: I just dodged this bullet. Had to talk my candidate into accepting the offer. I used all of the arguments you laid out and he finally saw reason. In my case, I don't think it was so much the counter offer as it was the huge career change it would be for him. Massive cold feet. But this is an occupational hazard...

Comment by Cheryl Burch Citrone on October 17, 2011 at 10:04am: Great post and I will be circulating this to all of my current candidates and adding it to my already expansive articles of why counter offers should NEVER be accepted. Unfortunately, some people never learn.

Comment by Christopher Perez on October 17, 2011 at 10:13am: Good post SeSee.

Bill S., I would be interested in learning from your resignation package offer. Please feel free to send me a private message via my profile page so we can exchange addresses. Thanks in advance for your generosity.

Comment by Mia Hirschel on October 17, 2011 at 11:00am: Great post. Thanks for sharing this experience.

Comment by lisa rokusek on October 17, 2011 at 11:19am: During the good old days (maybe 13-20 years ago) there were scads of articles about how folks who accepted counteroffers got fired/laid off soon after or ended up quitting. In fact if you google counteroffer and article you'll find one from 1998 near the top of the results written by the venerable Paul Hawkinson. Don't you find it scary that one of the top results on this topic is from 1998? I do.

Don't take a counteroffer, Mr/Ms candidiate. Ever. That was the line we gave people - if you accept a counteroffer you'll probably end up on the street sooner than later either because of your employer or because the conditions that made you want to look around didn't change with the 5-10K raise they used to counter.

The problem is, I don't think those stats are as accurate as they used to be. Maybe it is the crazy market but the last study I saw showed that a good chunk of counter-offer accepting people actually lasted over 3 years, which in my niche, is almost an eternity. We can't just hand out our tried and true articles and expect them to work, because our candidates are seeing people get counter-offers that do actually make them happy. Hard to sell against reality, man.

Does that mean we give up after doing 99% of our hard work? HELL NO.

It is even more important that we deal with the potential of counteroffers up front, during the process and at the end in the final critical stage of notice giving and on-boarding. I, too, have a process and a packet of information I give to my candidiates to guard against counteroffers. I modeled it after some training by Jeff Skrentny (one of my favorite trainers - HI JEFF). And I am happy to share it.

But even that is not enough. We need to know the motivations driving our candidates to look at opportunities. We need to remind them why this new gig is a better match for their career goals and we better damn well hope it sinks in. We also need to know that there are plenty of messages saying that counteroffers are good. We need to know that fact so we can work effectively against it. Because at the end of the day it is up to them to make the right decision for them, and our job is to make that be as much as possible the one that gets us paid.

I personally prefer that all my work leads me to a check that clears and a candidate that sticks.

Comment by lisa rokusek on October 17, 2011 at 11:23am: PS I almost said "...we better do more than damn well hope...." But I have to be truthful - currently I am HOPING on a deal.

Grrr. I hate it when I hope and when I try. Never a good sign.

Comment by SeSee Munson on October 17, 2011 at 11:30am: Lisa,

I would like to have a copy of your resignation package. I would also like to quote you, "I personally prefer that all my work leads me to a check that clears and a candidate that sticks." Obviously, it applies!

Comment by Kim Hudson on October 17, 2011 at 12:11pm: One thing that has always helped me to avoid being blindsided by the counter-offer, is to start discussing how the facts of counteroffers from the very first conversation. Not only that but continuing to discuss it throughout the entire process. This has been 99% effective.