How To Rebound When Job Candidates Accept Counteroffers
As a hiring manager, we've all been there. You search and finally find the perfect candidate for an open job position. You’re excited about onboarding because you are confident this candidate will contribute to the team. So, you go about processing the details. The background check comes back clean, pay and benefits have been negotiated, and a verbal agreement is in place. To make it official, you draft and send the offer letter to the candidate so they can formally resign from their current position. Then you wait.
Queue the Counteroffer
The job candidate doesn't respond with the signed offer letter within a reasonable amount of time. You get concerned. Then it happens. You get a phone call or an email from the candidate rejecting your offer because they have accepted their current employer's counteroffer. The conversation can start many ways but typically goes something like this, "My current employer has offered me more money to stay, and they've told me that they're going to fix the problems that made me want to leave. So, I'm staying here."
You go from shock to being a little angry in seconds as you start counting the costs of getting the candidate this far into the hiring process. But then you move from anger to reflection. Could you have predicted this? Is there something you could have done or said differently?
You're not alone. Every employer has been faced with the dreaded counteroffer that makes you question your ability to retain qualified talent. But counteroffers aren't always a reflection on you or your company. Often, it falls on the candidate and becomes a decision they come to regret.
Drawbacks of Counteroffers
Research tells us that 80% of candidates who accept a counteroffer from their current employer leave the company within six months, and nine out of ten leave within twelve months. Additional pay may incentivize them to stay, but money is rarely why employees decide to exit a company. Most of the time, there are underlying issues like a strained relationship with a direct manager, lack of growth opportunities, or a culture shift in play.
Paying employees to stay is seen as a "stop-gap" strategy to save the current employer the time and expense of scrambling to replace that employee, preventing business interruption but not truly solving the problem. One has to wonder why it took a threat of resigning to earn the additional salary deserved and if that’s a culture in which that employee can thrive.
Ask the Right Questions
In today's competitive market for talent, most top candidates are passive seekers. In other words, candidates currently working are actively looking or are open to new opportunities and are more prone to receiving counteroffers. In our 20+ years of experience, the best way of anticipating and hedging against counteroffers can be as simple as engaging in more open and honest communication with the candidate. It's a two-prong approach:
Step 1: During the screening process, especially for candidates currently employed, expand your interview questions. Include inquiries that do a deep dive into their current and past positions to help you fully understand why they are “really” leaving their current employer and what makes your company a better fit. How will their long-term goals look different as a result of coming to your firm? Candidates are coached not to say bad things about their current or past employer as it could reflect poorly on them. But you need to walk this fine line to truly understand why they want to leave or are open to new opportunities. Be skillful about getting to the bottom of their "WHY.”
The initial recruiter can sometimes find it easier to gather this intel from the candidate. They are not the decision-maker and will not penalize the candidate for having a less than favorable view of their current employer. Candidates tend to be more forthcoming with pertinent information here, giving recruiters a better sense of why they are looking to change.
Step 2: Before discussing offers, ask the candidate if they think they'll receive a counteroffer. Then run a couple of scenarios to gauge their reaction. What if their employer comes back with a significant salary increase to entice them to stay? How will they handle it? Discussing it with the candidate and helping them think through the "what ifs” can help you both prepare. If they are truly just looking for more money and you anticipate a counter, then you better have a backup candidate unless you’re willing to match or exceed the salary.
But, if their reasons stem from systemic issues, then talk about them. Help them realize there’s a very slim chance they will see any change, no matter what they're being told. If the environment is toxic, no amount of money will make the palpable. Provide proof that your environment is better. Have them talk with someone on your team that fills the same or similar role or walk them through an actual project to put them at ease.
Counteroffers are part of the hiring cycle. While you cannot control which candidates will face that decision, you can control your response to them. Preparation and honest dialogue are essential to properly vetting job candidates and mitigating your risk of losing your ideal hires to their current employers.