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Strategies and Outcome Considerations for Employment Counter-Offers

Counter Offers, Recruitment, Job Seekers...

In many high-growth cities around the world, the competition for skilled labor has intensified over the past five years.  To say that it is a candidate’s market is an understatement, and increasingly recruiters and hiring employers have experienced what feels like a ‘bidding war’ for technology and executive talent.

Learning that a valued employee has been actively seeking new employment opportunities, is both a personal and workflow concern for employers.  Recruiting to find a replacement for a skilled and experienced employee can be costly, and the time-consuming onboarding and training process can also be disruptive to the team while impacting productivity.

When an employer learns that a key employee has been offered an employment opportunity elsewhere, there are three general professional responses from the organization:

1. The employer wishes the employee well in their new opportunity and works to ensure that the departure is a smooth one both for the organization (department) and a positive experience for the employee who is leaving.

2. The employer finds the skills that the employee provides to be invaluable, and they are prepared to make a counter offer to entice the professional to stay with the organization.

3. The employer opts to release the professional prematurely.  While this can be misconstrued as being vindictive or ‘personal’ after the employee has reported the new job offer, it may be a policy that is related to protecting proprietary information.  This happens frequently when an employee is departing to join a known competitor in the same industry.  

In fact, some corporations have same-day walkout policies in effect, where the employee is escorted out of the building rather than serving the last 2-4 weeks of service before their departure.  This approach is also common when the employer does not wish to disrupt the productivity or culture (in the event of discord) of the organization.

Candidates Who Accept Employer Counter Offers May Experience Negative Consequences

In our experience as professional global recruiters, we often encounter situations where a candidate has successfully interviewed for a new role, only to be counter offered by their current employer.   And whether that counter offer is effective or not, the circumstance can have a damaging impact on the relationship between the candidate and their current employer.

If the candidate was very happy in their current role, but looking to advance their salary, the counter offer might be a mutually beneficial and positive demonstration of the employer’s intent to keep valuable talent within the organization.   Perhaps a recent salary increase proposal was declined? The employer would understand the next logical step, without prejudice and, if faced with losing the talented worker, acquiesce to the original request as a counter offer.

But employers also view that experience to be a negative one, particularly if they feel they have provided a competitive salary and other benefits consistent with regional norms.  If the employee is critical to departmental functions, the employer may feel that they have ‘no choice’ but to counter offer and increase the salary; being forced to do so circumstantially, is unpleasant however.   And it changes the dynamic between the employer and the candidate who was provided the counter offer.

We would like to separate business decisions from personal feelings, but to an employer who has been forced to provide a counter offer, the loyalty of the employee has been compromised in the process.  It is not uncommon for supervisors and other team members to feel distrustful toward the employee, and even resentful.   The team dynamic can also be damaged in the process.

It is not uncommon for an employee who received a counter offer to depart the employer (despite the accommodation) within 1-2 years afterward.   When a professional has made the decision to start looking for another career opportunity, that motivation involves more than compensation.  Getting the ‘pay bump’ satisfies one need, but does not address others, such as limited advancement opportunities, corporate values and culture, and even relationships with co-workers.

The potential for advancement for a professional who accepts a counter offer from their employer can also be compromised. Employers want to invest in skill development for staff who they feel will remain with the organization; once an employee has demonstrated they are surveying the job market for better opportunities, they may be intentionally overlooked.

Engaging in a job search with the intention to advance your salary with your current employer, is not a good strategy.  Not only can you miss out on a new opportunity, but you can create an offensive relationship with your current employer (even if you accept the counter offer).

What Should a Professional Do If They Receive a Counter Offer?

Consider what led you to pursue other opportunities in the first place.  Spend some time thinking about your current role, the culture of the organization and the availability of advancement opportunities, training and other benefits.  Do you see yourself happy in your current role in the next five years?

Avoid using an employment offer as a negotiation tool, if you are not prepared to leave your current employer.  Consider your options but be honest with your motivation for job search.   Is it based on a recent bad experience with a colleague or manager, which can be resolved without leaving your current position?  Or have you been unsatisfied with your role and work environment for a long period of time?

Remember that a significant amount of time and money is spent by employers to recruit talented prospects.  As a matter of integrity, avoid wasting that time and effort from a prospective new employer, and recruiter.  You don’t have to accept a job offer that does not fulfill your needs, but you should remain open and eager to make a change, if you are actively seeking new opportunities and interviewing.

When candidates have demonstrated a habitual behavior of applying for the purpose of eliciting counter offers, it can damage your professional reputation.

You can of course indicate to the recruiter that you are surveying the market to learn more about diverse opportunities and competitive salaries.  But do that research through online resources, or by speaking to mentors or other professionals within your sector, rather than interviewing without the intention to move to another employer.