It’s an all too familiar scenario. You have placed a candidate in a role, the terms have been agreed and offer accepted, all that remains is for the candidate to hand their notice in with their current employer. As with most recruiters, this is an anxious moment, when the dreaded counter-offer rears its ugly head.
There is often a typical scenario which goes something like this – the candidate’s current employer will ask why they are leaving, they respond by saying they have been offered an increase in salary and want a bigger challenge. The most common response is for the current employer to match the offer or even improve this slightly, other problems are often addressed and promises of change are given. This may seem a simple reaction with an easy choice for the candidate – but in reality it is so far from the truth of the complexity of what a counter offer is, the implications fall across all involved, here’s how:
The sole driver for a candidate wanting to leave is very rarely down to money alone, salary of course plays a big factor but often this desire for an increased salary is attached to the feeling of being undervalued or frustration because of lack of progression. A counter offer salary increase will paper over the cracks in the dissatisfaction with a job, however, more than often it doesn’t take long before the promises of progression and changes in process fail to come to light and the problems that made the candidate want to leave in the first place are still there or worse than before.
To add to this, the atmosphere often can be awkward, the candidate can feel like a marked person. The employer naturally becomes wary, or sometimes offended, that the employee wanted to leave. With this often causing a negative change in attitude towards the employee, it doesn’t bode well for either party.
It then doesn’t take long for the candidate to begin questioning why the current employer did not value them enough to offer them career prospects and increased salary without the threat of them leaving. The shine of the initial offer soon wears off.
The existing employer
In a seller’s market, the ‘buy back’ or counter offer has become commonplace but it’s a risky tactic. The reality is that the moment the employee starts looking for a job, you’ve lost them anyway, because 9 times out of 10 it’s not about the money. A frequently quoted statistic supports this with 80% of employees accepting a counter offer not being with the employer in 6 months and 93% leaving in 18 months after being bought back.
The accepted theory form the employer perspective is that they have invested a lot of time and money in that individual and them walking away with company information and industry knowledge will take a new incumbent many months to come up to speed with. Recruitment fees can be high and it takes time and energy to find a replacement.
It’s also not uncommon for staff to quietly go about their day-to-day work without complaining. They might well be quietly looking at job searches at the same time and you don’t know anything about their dissatisfaction until the day they walk into your office and resign.
Ultimately the counter offer is pointless and damaging for both parties. The trust has gone, bitterness builds and suddenly your best employee is no longer your best employee.
In this seller’s market, employers need to look at internal career progression and be honest with their staff.
Being bought back is staving off the inevitable and the person is more than likely going to leave anyway, 9 times out of 10 the candidate will end up leaving 6-12months later anyway, because the root issues which made them want to initially leave are often still there. It’s the nature of the business that people will always move on but employers need to be better communicators otherwise those revolving doors will never stop spinning.