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 Sandra McCartt on October 17, 2011 at 5:28pm: I agree Ken and believe me when a new offer requires moving mama and the kids and selling a home if the counter is the same as the new offer MaMa and the kids swing a lot of weight and who can blame them. Yes it may be the devil one knows as opposed to the angel one doesn't know yet but these are tenuous times. You are very corect that employers are rehiring talented people who left and want to come back. The reverse of the counter offer perhaps. I think i have seen more of those in the past three years than i have people taking counter offers. It's a strange world out there in the employment ranks right now. It makes me want to post a job that starts out with, "Only unemployed candidates will be considered". Not sure one can equate hiring the unemployed to dating a fat guy but there is a lot to be said for those who are grateful.

@James, yes you are correct it's a new world and in a lot of cases it's a very cautious new world and not a brave one. I remember the .com well and i remember what came after it when all those little darlings who were paying themselves 100K a year with venture money became part of the walking wounded after the .flop.

Comment by Terence on October 18, 2011 at 4:06am: When I first started in recruitment I learnt the general line when it comes to counter offers as mentioned above and apart from when they are complete lies and never materialise I have to disagree, I think we see this from a recruiters point of view and have these stock answers to give to applicants before the process begins re counter offers and again when they happen, it's just not my experience that the person is on borrowed time or has used up any credit with their company. How many times has the applicant gone to their employer before they start looking to let them know they are unhappy or want a pay rise or promotion therefore giving the employer the chance to re-act, look at it this way if you have a client you have had on full fee for the last few years and they spend a lot of money with you, they have never asked for a discount or reduction a rebate extension and have been an excellent source of income over the last few years, a new company comes in with a better deal and have given them a very good service and have offered to reduce their fees to undercut you significantly, now you are in danger of losing this steady stream of income and you have reduced rates in place with some of their competitors so it's not as if you are setting a precedent you want to keep the business. You offer your client reduced terms to remain competitive and retain the business and their answer is "So why didnt you offer me these terms before? Do you not value my business?" Counter offers are a part of recruitment but I don't think they represent anything other than part of the process they are not malevolent on the whole and if someone offered to triple my money and give me a cash bonus unless I was terribly unhappy I would probably take it. We need to stop seeing things from purely our own point of view to be truly honest with our selves and improve performance and results. Keep the guy close if things don't work out as we assume they won't we can palce him elsewhere if he's that good.

Comment by Jerry Albright on October 18, 2011 at 9:53am: Some times I get sick of the same old lines we've been saying for the past 20 years. Where does the "80% of people who accept counter offers are gone within 6 months" line even come from? It comes from us. One of us made it up in the 80s and so we've just accepted it. I think it's BS.

It's more important to understand why someone is interested in a change - and uncover someone truly motivated to move on. This comes in part from having heard everything over the years and knowing when something sounds "canned" vs. something from the heart.

But the Counter Offer subject is deeper. You'll see signs that someone is not "all in" from the beginning. Do they keep their first appointment with you? Did they update their resume FOR you - or did they expect you to do it? Are they calling you? Or simply answering the phone when you call? When you ask "What (specifically) has you considering a change?" --- do they answer with "I'm not being paid what I should be."? < And if that IS their answer - do you let them know they really should just go ask for a raise?

The real question is ARE YOU WORKING WITH THE RIGHT PEOPLE?

Also - you most certainly WILL have counter offers ruin your day on occassion. If you don't - you're not making enough placements. Anyone could sit here and make one absolutely perfect placement from time to time while avoiding any chance for disappointment. As for me - I say BRING IT ON!!!!!!! I'd rather place 20 and lose one or two than sit here babysitting 8 or 9......

Comment by Jerry Albright on October 18, 2011 at 10:04am: Another point might be to NEVER even CONSIDER the FEE (amount....what you're going to buy....how much your commission is.....any part of it) until you need to put together an invoice. Once you start to figure the dollar amount you have a sense that it's done. Avoid this thinking at all cost.

You WILL lose one from time time time. The more you can avoid the mental pain of it all - the better you'll be at getting back on the horse. It's what we do.

Comment by Kevin Shea on October 18, 2011 at 1:02pm: Sesee,

Great article. We were discussing the same topic internally the other day.

Bill S. - I would love to see your resignation package if you are willing to share. Thanks!

Comment by Francesco Reggiani on October 18, 2011 at 9:25pm: This is very interesting. Thank you SeSee.

Dear Bill can you send me the resignation package you mentioned before?

I've just been burnt recently by this kind of situation, and it is good to learn how to front it.

Comment by Trevor Jones on October 18, 2011 at 9:35pm: Yes we have all had these. I try to prepare for counter offers but would welcome more information on the "kit" if possible.

This situation tends to undermine your client relationship and you will certainly be very cautious in offering this candidate to anyone else. This is a point that candidates often overlook. Thanks for the topic

Comment by Tom Byrne on October 19, 2011 at 8:14am: Great article SeSee, thanks for sharing it!

Bill/Lisa, I would love to have a copy of your resignation package. Please contact me via my profile.

Thanks!

Tom

Comment by Nick Lagos on October 19, 2011 at 9:16am: Great Topic Sesee,

As mentioned by many esteemed colleagues in this post, we all get burned by counter-offer acceptance from time to time, even with early intervention, and that’s because there are now and will always be good reasons for a candidate to accept them.

Reasons are as varied as the situations candidates and companies find themselves in. Canned retorts and sighting bogus statistics simply lower trust and our value proposition in the end. We probably all “bring it up early” and talk through the likely-hood etc., but if we’re worth our salt, doing what’s right should be paramount, even if its supporting a candidate’s decision to accept the counter if it truly is best for them and their families. As Jerry sights, the “flags” start showing pretty early anyway, I think we just tend to delude ourselves if we’re not careful. If we're TOTALLY surprised if it happens after we've made the offer, we probably missed a “tell” or two somewhere along the way (I know I have).

Guess we could write a book on how many factors involved in making placements can derail you, and sure we do what we can to mitigate, but one solution tends to circumvent them all.

In the words of Danny Cahill, “COVER THE JOB!” That is to say, I like to have 3 great candidates under consideration with at least the first 2 somewhat interchangeable (client likes them both a lot, sometimes for different reasons but that’s fine). To that end, I’ve introduced stellar candidates at the 11^th hour, even if the client already seemed to settle on a candidate. Early intervention regarding counters with candidates is mirrored with clients when I explain to them we need strong “seconds” and encourage them to see additional stellar (and only stellar) candidates, even if they think they are ready to settle on someone. If I don’t have 3 in the hopper (that the client really likes), I don’t let up. Rather “burn cycles” there, than “wring towels” later.

“Cover The Job”, and when any of the multitude of fall-offs rear their ugly head, take a deep breath and recognize the extra effort exerted to bring in additional “stellar” prospects even when the “sure thing” appeared in the offering, was well worth the effort.

Thanks Sesee for bringing this up, lots of great ideas generated by the group and it's truly appreciated!

Comment by Steven J Sergi on October 19, 2011 at 5:26pm: SeSee, you are on to something, I've never been able to control the countero-offer cunundrum over the years. And it's always a surprise to my team when it happens ironically..

Bill Shultz I too would love to read your "Resignation Package". What a great idea! Feel free to contact me via profile page privately and we can exchange email addresses. THANKS.