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 SeSee Munson on October 17, 2011 at 12:14pm: Admittedly, I made that mistake. Assuredly, it will not happen again! I let my guard down, assuming that the company was going to go belly-up any minute and therefore there was no potential CO lurking in the wings. Yikes. It was painful. But, it happened. Thank you for reading/posting!

Comment by Sandra McCartt on October 17, 2011 at 12:18pm: On very good reason to look for a good unemployed candidate. They don't get counter offers and a lot of good people are unemployed.

The landscape has changed as Lisa has mentioed. My new speech to candidates about counter offers goes something like. "If you are faced with a counter offer, let's make sure that it is one that is big enough that if they put you on the street in a year that you don't regret it." "If you are made a counter offer, counter with a larger asking amount, if they are willing to buy you back don't sell out cheap."

Comment by Christopher Perez on October 17, 2011 at 12:29pm: I like your approach, Sandra. It mirrors mine. If clients or candidates get a whiff that we (recruiters) are putting our needs ahead of theirs, credibility is shot. But if we give advice that is inarguably in their best interest-- especially if they actually pause and say "I can't believe I'm getting this advice from a recruiter"-- pure gold. Not to mention it's the right thing to do.

Of course the brilliance in your approach is that you avoid looking self-serving even as you give the candidate a chrome-plated reason to be skeptical of a counter offer...

I find it very rewarding to be in a profession that rewards integrity, psychological savvy, a strong EQ, and the ability to solve complex problems.

Comment by Bill Schultz on October 17, 2011 at 12:48pm: @Lisa- I think mine is based on Jeff's seminar as well. :)

Comment by Randy Levinson on October 17, 2011 at 12:57pm: Great Article Se See. I have had my share of candidates accepting counter offers and I do still maintain that they will ALL be on the market 6-18 months down the road. But since I have moved to managing recruiters and train people who are just breaking into the business I do coach other recruiters like this: When you talk to a passive candidate be sure to drill down with them as to whey they are willing to leave. Go over with them a few key facts about what a current employer can truly offer to entice them to stay. They ca offer more money and they can offer promotional opportunity, but they can't change the culture, they won't be changing their management, they won't be changing their approach to the market. We all go home at night and at some point, whether at the dinner table or while lying in bed mutter to ourselves, "this is what I would have done if I was the manager, director, VP, CEO, etc..." As a recruiter you must play to that state of mind with the passive candidate, essentially let them know, "What you have might be good, but what I can offer, in terms of what you have told me you want, is better and here is why..."

As recruiters we need to be to foremost experts on the candidates as well as their advocate not only to our clients, but also back to the candidate themselves. In that role we need to know everything. So like yo suggest, do the deep dive on your candidates, get to know them as talent as as people so you can really speak to their base motivation and help them. That approach should ultimately land that check in our mailbox more often.

Comment by lisa rokusek on October 17, 2011 at 1:38pm: Yeah, thats good, Sandra. It is kind of like asking for immediate release. They are excited and should want to start ASAP, correct (of course without burning bridges!)? But countering a counter can drive the behavior we (and ultimately they) want.

Comment by FREYJA P. on October 17, 2011 at 3:42pm: I think stats will show that some counter-offers are always accepted. An in-depth conversation I always have with candidates is, "So what are you going to do with your counter-offer?" - and we repeat the conversation again just as the interview process begins.

That one person who isn't truly comfortable with change takes the counter-offer anyhow - but with me they don't happen very often.

Comment by Sandra McCartt on October 17, 2011 at 4:00pm: @John, i am finding exactly the opposite to be true when it comes to unemployed candidates. Depending on their reason of course, but many people who have gone through the nightmare of being unemployed due to layoff or closing of their company in the past three years seem to be so delighted to be employed again that they go to work, do their job and don't bitch. The horror of unemployment lasting more than 90 days has been enough to make many people rethink their wants and needs.

Comment by Sandra McCartt on October 17, 2011 at 4:14pm: I never blow off a good candidate. If they were good enough to get an offer the first time and took a counter offer, i have to look at it from the standpoint of what would i do. I have had a few who never dreamed they would get a counter offer, they got one that was significant. If the counter is more than the offer from the new employer, would i take it. I just might if money were the main reason i was looking.

In my many moon in the world of recruiting i have never seen a company make a counter offer to the same person twice nor have i ever seen a candidate take a counter twice so i will work them again. Just placed a CFO who did exactly that. Took the money, took the bonus. Called me back a year later and said, "Ok, now i'm really, really ready to move. I did and he did and the check for over 30K went in the bank Monday. The whole deal took a week because he was that good a candidate.

If it's a 75K a year IT guy who operates like a coding whore that's a whore of a different color. :)

And believe me if a doc decides to stay where he is after getting an offer, i send him an email every 90 days to see how things are going. People change their minds later for all kinds of reasons, some folks even remarry their ex spouse and sometimes it works.

Comment by Ken Forrester on October 17, 2011 at 4:55pm: I find that most candidates don’t interview to get job offers with the objectives of getting a counter offer. They certainly won’t close the door on a counter offer because they sincerely believe that if they are offered one it is because their value is finally recognized. When one recruiter tells the pitfalls of a accepting a counter offer; and the spouse/ friends/family talks about the possibilities of upping that offer -what do you think your candidate will do?

Also, two things have changed in corporate America. Employers are now open to rehiring ex-employees and employees no longer see an employer as long term job security.

That said, I believe that it is more effective today to prep the candidate to expect a counter offer, how to manage the counter offer process; with objectives of not the burning the bridge for returning to that employer in the future.

If this is done before an offer is extended, you will have a more confident candidate submitting a letter of resignation instead of a scared nervous and timid one. Which is the fuel for counter offers.