Thinking of a counter offer? Our advice to employers and job seekers
Whether you’re a client or candidate, having to be either side of a counter offer isn’t a great place to...
Whether you’re a client or candidate, having to be either side of a counter offer isn’t a great place to be. We look at reasons why a counter offer might be on the cards, and more importantly, what to do to avoid getting yourself into this position next time.
The rise of the counter offer
In recruitment terms, the counter offer is the employer’s attempt to keep a high-performing employee from leaving, and usually includes the offer of a material increase in salary. In recent years, hiring headwinds have seen counter offers become massive in the market. As recruiters, we’ve seen employers add as much as 30-40% to someone’s salary, purely because they’ve been backed into a corner.
So why is it happening?
At Bristow Holland, we’re really clear on counter offers. Basically, we believe that employers that resort to counter offers have failed in their duty.
If that sounds harsh, then consider this. A counter offer means that you’ve failed to read your employee’s mood. You failed to keep them up to date with where the market should be. And as a result, you’ve put them in a position where they’ve needed to look elsewhere.
Of course, not all people move jobs because they want more money. Some want more flexibility, but even in a post-Covid era, salary trumps flexibility over everything else. The rising cost of living has put people in a position where they feel they have no choice but to look around. And if you haven’t kept pace, then that’s an issue.
Counter offers: advice for employers
Naturally, it’s easy to feel affronted when your employee comes to you with their news. Some are angry and turn the employee into a pawn in a game (“how dare someone else take my staff?) Many more are desperate as they fear how to fulfil their contractual obligations without that lynchpin of their team.
So what’s the one thing that can make it all go away? Money.
And actually, a counter offer is easily the most cost effective option, at least on the face of it. Putting a pay rise in someone’s way, to bring them up to market rate, is far more efficient than going through the whole recruitment process once again. But as employers know only too well, it’s most often just a sticking plaster over the issue. Stats vary, but it’s likely that 80% of those who accept a counter offer will leave within six months.
Key takeaway for employers – review what you’re offering your employees, routinely. And if someone offers their notice, and you’re confident that you’re paying market rate, then you can confidently thank them for their service and wish them goodbye and good luck and take the opportunity to freshen up your team.
Counter offers: advice for candidates
Now let’s flip to the employee side. Receiving a counter offer can stir up a whole host of emotions. One one hand, it can make the employee feel wanted and create a much-needed boost to their morale and self worth. On the other hand, it can release resentment (“now they want me!”).
Employers may invest the full power of HR and Leadership to ‘love bomb’ the employee to stay. In this situation, it takes a strong person, someone on the top of their game, to say: “Thanks, but no thanks. Try again with the next person – I’m gone.”
But as an employee, note this: in most instances, your employer isn’t putting a counter offer on the table because you’re brilliant – they’re doing it to make their lives easier. It’s a late admission of the fact that they weren’t paying you enough or supporting you correctly in the first place, and you caught them out.
Ultimately, in the vast majority of cases, the counter-offer process plays havoc with peoples’ minds, makes them feel uncomfortable, and ultimately creates a dysfunctional relationship – hardly the bedrock of a successful partnership.
Key takeaway for candidates: if you’ve committed to the rigours of the recruitment process, and found a job that offers you what you’re worth, then stay strong: or risk entering into a dysfunctional relationship with your employer.
If you’re looking for more information about what the market rate looks like, then get in touch.
