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Why You and Your Candidates Should NEVER Accept a Counteroffer

by
Carol Schultz
Aug 9, 2012, 5:21 am ET

(Editor’s note: With so many new ERE members coming on all the time, we thought that each week we’d republish one popular classic post. Here’s one, below.)

For the sake of this article I’m going to assume you know how to qualify your candidates regarding opportunities from the moment you first speak to them until they’ve signed the offer letter and started their new job. I’m going to assume you’ve been communicating effectively throughout every step of the interview process and have been asking quality, qualifying questions to ensure you’re not getting “sunshine blown up your skirt” regarding their interest in moving on to a new company.

There’s nothing 100% foolproof and guaranteed, but good methods of pre-qualifying candidates regarding counteroffers will make your life less stressful and more financially rewarding. In addition, if you are straightforward and authentic in your qualifying methods you may even weed out any candidates who would accept a counteroffer and possibly leave you and your client/company hanging.

Step Away From the Counteroffer!

First, let me say that I know the word “never” is a strong one. It’s absolute and I don’t use it lightly or without substantial consideration because the world I live in, both personally and professionally, is gray. That said, when it comes to considering whether or not to accept a counteroffer, remember that accepting a counteroffer only works out positively in a fraction of the cases; it’s just not worth the risk. I have known people who accepted counteroffers and in the vast majority of situations they regretted it.

Career Suicide

Accepting a counteroffer can be career suicide on a number of levels. A counteroffer may be tempting, flattering, and very appealing to a candidate who isn’t truly committed to leaving his job. After all, who doesn’t get an ego boost when, upon giving notice, the employer offers more money or a promotion to stay?

As a recruiter you must resist the temptation to persuade candidates to accept an offer if you have even the slightest hint that the position in question isn’t the right fit for your candidate or that the candidate is using your offer to get his company to cough up a counteroffer. It’s hard, especially if/when you’re depending on acceptance to make a living. People often buy on emotion, and enticing someone to take your offer (or the candidate’s current company getting their employee to accept a counteroffer) by getting him excited and hopeful is just plain out of integrity. Temptation can be very seductive and hard to resist. As George Bernard Shaw said, “I never resist temptation because I have found that things that are bad for me do not tempt me.” That said, let’s look a some of the reasons not to accept a counteroffer. Make sure you use these methods to qualify throughout the recruiting process.

  1. The current employer is attempting to cover their tush. When an employee quits they lose money. When an employee quits the manager looks bad. Better to keep the employee on board until they can find a replacement. And don’t think this can’t happen; it can and it does. A pink slip may follow sooner than the candidate thinks.
  2. The employee becomes a fidelity risk to the current employer. He’s threatened to quit once; it’s only a matter of time before he does it again, and smart companies won’t allow themselves to be put into this situation. The employee will never be perceived in the same way by the company once he’s threatened to quit, then decided to stay.
  3. Any situation that causes an employee to seek outside offers is suspect. For example, if money is the issue why does it take a full court press for the employer to pay more? If the employee is worth more money now, why weren’t they worth it 15 minutes earlier when they said they were quitting?
  4. The reasons for wanting to quit will still remain, even if they are temporarily shaded. For example, if the employee has issues with his manager those issues will still be there at the higher salary.
  5. Quality, well-run companies don’t give counteroffers … ever! How would you feel if one of your employees forced you into something? ”If you don’t X, then I’m quitting.” I know I’d be angry. I’d be more than angry. If they don’t like working for you then they should go.

If you do get the urge to accept a counteroffer, just be prepared for the consequences whenever they do show up.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Cathy Morgan

    Employee engagement can be one of the biggest differentiators a company can have. I
    recently read a great post about how one company is using gamifcation with online
    scheduling to increase engagement. Check it out “How Gamification Can Help Increase
    Sales.” (http://skedx.com/employee-engagement/how-gamification-can-help-increase-
    sales/)

  2. Jaymie Spencer

    Agreed, you should never accept a counteroffer (and remember to speak with candidates about counteroffers BEFORE they give notice). Relationships are based on trust. When you do something like quit, you’ve messed with the trust of your manager. We all know that trust is not easily rebuilt, and it is certainly not fixed when you accept more money to stay put.

  3. Darryl Clements

    Good advice, Carol. However, I would add that it’s usually first wisest to ask for the things you want, including better pay. That gives the employer a chance to react to your wants. If the answer is no, then it’s no and time to move on. Even then, it sets up the fact that down the road, your former employer may try to recruit you back but they will also know more about what it will take to get you back.

    This approach also leaves less ambiguity that can be spun in a negative way (eg. is greedy, unrealistic, etc.) when it just may be that what you want isn’t available now when you want or need it.

    Finally, I’d add that the single best reason to decline counteroffers is because the decision to leave should have been made before landing another opportunity. It’s awfully hard to perform at your best in the new landing spot if you’re mentally hanging on to an old wish list for your current job/employer.

  4. Carol Schultz

    @Darryl: You are absolutely correct about approaching your current employer about fixing your issues before going out to interview. This wasn’t the point of the article so I didn’t include it. Thanks for your comments!

  5. Lance Haun

    I never expect recruiters to support counteroffers. Employee movement is good for the industry and the counteroffer situations that stick out in their minds are the nightmare scenarios.

    But I’ve done a couple counteroffers (out of the hundreds who have voluntarily turned-over over my career) and they’ve all been successful. Here are the differences in my mind:

    1. We didn’t do counteroffers and everyone knew that. So when we pulled one, it was a big deal. We were happy to let 99% of people walk. People who wanted to use it as a negotiating tactic were out the door.

    2. All of them had been recruited as a “passive” candidate and sold hard by a poorly trained recruiter. Your line about selling on emotion rather than substance and fit is spot on.

    3. There was no extra negotiation. We heard their concerns (most of which weren’t big enough for them to look on their own but big enough to listen to another offer), and we made a meaningful play. They were talented people and if the stars aligned, we felt good about making a counteroffer.

    That’s it. I think if we tried to force counteroffers, you’re going to end up with the situation described here. But if the perfect counteroffer situation is blinking right in your face, I think you take it despite the “never” proclamation. Just know that, at least in my case, it was less than 1% of the cases. Almost never, except when it hit you right in the face.

  6. Brian Kevin Johnston

    While the article is relevant This is an “OLD SKOOL” paradigm (mindset)… The “stigma” of accepting a counter offer is not the same as it used to be… You just need to be better than your competitors in recruiting/retaining talent period… The companies/recruiters who leave there egos at the door, win in the new economy, and the new economy is “inbound” sales/marketing/recruiting.

  7. Carol Schultz

    @Lance: Spot on!

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  10. Lorraine Grimes

    I have been on two different sides of counteroffers. As a Corporate HR Director offering one and as an Independent Recruiter losing a candidate because of one.

    In the HR role, it was considered a temporary fix only to get us through a current project. More was expected from the employee and their loyalty came under scrutiny. More times than not I was asked to start a confidential replacement process because one way or another that person was going to be gone within a year. Issues that may have been raised were rarely fixed; simply placated with more money.

    As a recruiter I have lost only a few candidates because of a counteroffer. I’ve been fairly productive in determining who is truly ready to make a change and who is only looking for leverage with the current employer. Of the few I lost most were back in touch with me between 6 months and l year later to renew their search.

    Sorry to say but my experience has taught me that counteroffers benefit only the employer and only on a temporary basis. Rarely does it work out well for both parties.

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  12. Carol Schultz

    @Lorraine: Thanks for your POV. For the fraction of a percent of the time when a counteroffer works out, it’s just not worth it.

  13. Ben Phillips

    Said like a true agency recruiter Carol.

    I’ve discussed this very issue on a previous post on my blog – (I’m gonna make you a (counter) offer you can’t refuse…) http://www.trecknowledgy.com/?p=128 – here I give advise / opinions from 2 sides of the fence i.e. and agency and in-house perspective.

    When I was agency-side I was trained to give the very same reasons to a candidate for declining counter offers i.e. you’ll regret it, you’ll be a marked man / woman if you decide to stay etc. I was trained to do this for one very simple reason. To protect my interests as an agency recruiter – not the candidates. As an agency recruiter you want to ensure you’re not about to waste your time representing someone who, at the end of a potentially long process, is going to stay put.

    In some cases these are valid points but there are many reason when this just isn’t the case. Yes, you’ll get the maverick, cavalier candidates who are moving simply for money – these are easy to spot. There are many who have got themselves in to a rut with genuine misconceptions about their exisitng employer who can, and should be convinced to stay if their judgement to leave is based on misconceived untruths.

    Having been in-house for 4+ years I’ve seen people change their mind after having handed their notice in and you know what – If the company in question is truly passionate about its people, handing your notice in can sometimes be the catalyst to positive change.

  14. Ambar Naik

    Quite some time since there has been a good article with counter-offers in spotlight!

  15. Marguerite Granat

    I agree that taking a counteroffer is in the long run a loosing proposition. A company that truly values its employees is going to respect the employee’s decision to move on to another opportunity and has a policy of not offering counters. Counters also come in different forms. They are not just money. I think that the best way to negotiate change is by being a change agent rather than through threatening to leave.

    The best organizations develop a culture that encourages an alumni network of previous employees. This offers the best of both worlds. The employee who leaves in good terms knows that at a future date maybe there is an opportunity to come back.

    Carol, great post. Very thought provoking.

  16. Richard Morris

    I do not know of a single instance where somebody who has accepted a counteroffer has received any long-term benefit.

    All the reasons the candidate initially looked outside of their current organisation inevitably creep back into play over a period of time, usually within two years. The experienced recruiter should be able to identify the symptoms of somebody who is likely to accept a counteroffer and either drop them like a stone or warn the client of his suspicions, depending on how concerned he is regarding the likeliness of an acceptance to a counteroffer.

    This does not detract from the fact that on occasions some candidates will go out of their way to be deceitful to the recruitment consultant, potential employer and indeed existing employer in an attempt to hold their current employers over a barrel and engineer a counteroffer.

    In all honesty, if the relationship was that good between candidate and current employer in the first place, there would be no need to blackmail the company and the employee would have been rewarded accordingly, either financially or in terms of position. The action of handing in their notice may prove to be the final straw and the assumed counteroffer may not be forthcoming.

    Richard Morris, Executive Search, Finance, Archer Mathieson.

  17. Mitch Sullivan

    This point of view is as old a stereotype as recruitment agencies themselves. There should be no problem joining-up the dots on this one.

    Whenever I’ve asked anyone who has published an article warning people to never accept counter-offers to provide any evidence to support that claim, I’ve never had a response.

  18. Keith Halperin

    We just had an interesting variation on the countre-offer story- it was sort of a “pre-emptive counter offer”.
    My colleague had interviewed an exceptional candidate for a sr. position with my client. The candidate who had been hired by a friend, let the hiring manager/friend know he was interviewing at our company. The hiring manager promptly promoted the candidate, who took himself out of the hiring process. (Perhaps the candidate was “playing us”.)

    -kh

  19. Jim Baran

    Agree with Ben & Mitch. “Never” accepting a counteroffer is like saying “I’ll never get angry”. This is an old, tired point. It’s a new career market. Hopefully a strong one.

    It’s dollars and sense (common) issue. Not every offer is a good one. Not everyone is paying attention to my career satisfaction 24/7.

    New argument: Why not accept a counteroffer now. If things don’t work out later, you’ve raised your bottom line negotiation base line for new opportunity. If it works out, people are now paying attention.

    Jim Baran
    Owner, Career Kaizen

  20. Jim Sullivan

    I have had some counter offers accepted over the years and the candidates that took those offers are normally back to me within 6 months to one year saying that they made a mistake, I have had many call back within 30 days asking “Is that job still available?”

    The reason most give is “I’m making a little more money but nothing else has changed, the reasons that I decided to look outside (other than the money) have not been resolved.”

    My latest counter offer was to an engineer that had requested to be given more responsibility and a raise several times over the last 18 months with his current organization. I found him an ideal position with a defined career path and a healthy increase in compensation. When he told his boss he was leaving they immediately gave him a counter offer (to where he should have been but still below the offer he had received) and he rejected it, they then proceeded to up the ante 2 more times. But the job didn’t change, his responsibilities didn’t change, and he was still tempted to take it. I asked one question “Other than the money what has changed to make your job better?” He rejected it and is happy in his new job.

    I can only think of 1 or maybe two that actually worked out for the candidate. And that is with 34 years of recruiting. So I guess as Mitch said NEVER is too strong, but the odds of it working out in the candidates favor are about as good as buying a lottery ticket. Only in this case you are gambling with your career.

    But life is a gamble, in the end candidates must go with their gut. WE don’t make decisions for them, we can only counsel them per our past experience.

    It’s like the call I received from a company that asked “why are you stealing our people?” I told them that I don’t make that decision for them, I only offer up what I have and they make the decision to leave. If you kept them engaged, challenged and happy they wouldn’t be talking to me in the first place.

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  22. Leigh McKiernon

    Yes, agency-side recruiters are trained to handle objections which are detrimental to their interest of placing. However, the reasons listed in the article are based on actual working examples – all of these things have happened, however they are advocated a little more than the frequency with which they happen.

    There’s little incentive for a recruiter if a candidate takes a job, but doesn’t ‘stick’. Most, if not all agencies build in refund or guarantee type clauses to their contracts. Even if you can get a candidate to ‘stick’ for 3 months / 6 months or whatever the period is, a client is going to be less than impressed – particularly if it happens more than once.

    Some people move for money, but a recruiter qualifies a candidate around motivations, and should only deal with a candidate where money isn’t the only motivation. 90% of candidates move because satisfaction has gone from their existing role. It can be overcome by moving them sideways into a new role and a new challenge, but there is usually a genuine reason why someone would invest the time in proceeding through an interview process.

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