Learn How to Respond to Accepted Counteroffers

Counteroffers: Part III is the third of a three part series. Part I addressed the argument against counteroffers from the job seeker's perspective. Part II addressed the argument against counteroffers from the employer's perspective. Part III addresses how to respond to an accepted counteroffer, and why counteroffers are a poor response to an employee's resignation.

Learn How to Respond to Accepted Counteroffers in Three Easy Steps

by Joe Kenderes, CPC

The hiring process doesn’t always end when your offer is accepted by a prized recruit. This reality is often overlooked, and when something unexpected happens after a search is “supposedly” completed, ill prepared hiring managers get caught like a deer in headlights. I am specifically referring to a candidate who has accepted your offer of employment, and subsequently accepts a counteroffer from their current employer.

In this article, you will learn how to respond to accepted counteroffers, and why counteroffers are a poor response to an employee’s resignation.

You’ve just been given word your prized recruit accepted a lucrative counteroffer only three days before orientation. Your first instinct is to match the counteroffer, right? Wrong! Your first step should be to sit your hopeful new hire down and remind them of their original motivations for exploring employment opportunities. All that’s really happened is your new hire’s current employer got scared when they learned their top performer resigned. They did the first thing that typically comes to a hiring manager’s mind: throw a bag of money in their lap.

And, it’s only natural for job seekers to get excited over a substantial financial increase. Your prized recruit needs to be reminded of their original motivations for exploring employment opportunities and accepting your offer. Was it your flexible hours? Was it the growth potential you provided? Was it the office politics and micromanagement they were trying to get away from?

Salary increases are probably the most widely associated benefit job seekers realize when changing employers. That’s primarily because compensation is tangible compared to other reasons, and much easier to talk about with family and friends. More important motivations almost always exist, at least for top performers. It’s your highest responsibility to remind your prized recruit the reasons they originally decided to leave their current employer, as they likely still exist.

The next step is to educate your prized recruit on why it’s dangerous to accept a counteroffer. In Counteroffers May Be Tempting; But DON'T Bite the Apple, I offered multiple reasons why counteroffers should not be accepted by job seekers. Consider also sharing this alarming statistic:

In a study conducted by the Wall Street Journal over a three year period, within eighteen months, 93% of individuals who accepted counter-offers had left, some voluntarily and some fired. All the remaining 7% were actively seeking new employment.

So what happens when a counteroffer is substantially higher than your offer? If you’ve sequentially moved through the first two steps without success, then cautiously consider the third step: being financially flexible. If you still want your prized recruit to join your team, I recommend considering a good faith attempt to sweeten their compensation package. In my experience, an incentive / bonus program, signing bonus, or slight increase is starting salary is usually enough to earn their attention. I do not recommend matching the counteroffer, unless the dynamics of your situation warrant such dramatic actions.

One of our clients recently found themselves in the following counteroffer situation.

UpSearch successfully recruited a top performing Executive away from a well-known regional consulting firm, and placed them with one of our long-time clients. The candidate’s motivations for exploring employment opportunities had little to do with compensation, as they were already well compensated. Their motivations were professional growth and better lifestyle balance, two criteria their current employer failed to meet. Our client’s offer was immediately accepted, which include a 7% increase in their current base salary.

As the process of resigning unfolded, it quickly became clear how important our candidate was to their employer of record. Executives were flying in to personally make their case. New titles and extra responsibilities were proposed, as well as a 20% increase in base salary.

Shortly afterwards, we received the “I need to consider a counteroffer” phone call. The candidate was torn because the long-sought-after attention and 20% pay raise felt good. We immediately gained the candidate’s agreement on another conversation with our client before making any final decisions.

That’s all our client needed, an audience. They took a congratulatory tone and expressed their gratitude for the opportunity to touch base. By then directing the conversation toward the candidate’s original motivations and sharing a few facts about counteroffers, the hiring manger earned the right to continue courting their prized recruit. Our client decided it made good sense to increase their offer to an 11% increase, still far below the counteroffer’s 20% increase.

By focusing on three easy steps, our client successfully retained their new recruit without breaking the bank. Remember to move through the following steps sequentially;

1. Remind the candidate of their original motivations for exploring employment opportunities.
2. Educate the candidate on the pitfalls of accepting a counteroffer.
3. Be prepared to demonstrate your interest with a little financial flexibility.

The potential risks associated with not methodically working your way through counteroffer situations can be extremely expensive. You risk loosing large sums of your company’s resources by hiring the wrong person, and miss a unique opportunity to improve your team. How many opportunities do you really get to improve your team’s performance from the outside in?

If you’ve come to the conclusion the job seeker’s primary motivations are compensation, then they probably aren’t the right person for you. Furthermore, if someone has already gone through the emotional process of disengaging from their current employer and then decides to stay for a few hundred dollars more per month, it’s a sure sign there’s a problem. They’re either primarily motivated by money or simply aren’t ready to leave. Either way, its time to move one as it’s a chase that shouldn’t happen.

In summary, the more emotionally in control you remain the better you will be able to facilitate “the counteroffer conversation.” Be prepared to go after what you want the right way. But, also be prepared to walk way.

Joe Kenderes manages the hiring needs for a national portfolio of manufacturing and distribution clients. Joe can be reached at 888.830.1904 x251 or jak@upsearch.com.

Emotional Intelligence: The Secret Sauce to Success

by Luigi Pecoraro

You might say a good sauce is a matter of taste. Your right and I know. As a person with a strong Italian heritage, I pride myself on making a good sauce. But while we might all have a hearty discussion about whose sauce is really better (Mom’s of course), because of our own developed tastes, the ingredients are pretty much the same.

Fundamentally you have good tomatoes (I prefer fresh roma), fresh minced cloves of garlic, virgin olive oil, fresh onion, and then flavored with beef (meatballs) or pork (sausage links or ground), and finally sprinkled with a unique blend of herbs like maybe some basil, oregano or parsley. From there, you’re on your own to “customize” your brand. Perhaps some sugar or various pepper options, or whatever you’ve learned to like.

Regardless of the final blend, with the core ingredients in place, a good sauce smells great and elicits wonderful emotions. To this day, I still feel the love of my mother and the warmth of her touch in the smell of a good sauce.

While we all know the nose is the most powerful sense, the sixth sense that is most significant in relationships and business is Emotional Intelligence. This is not a vague intuitive sense of how to relate to people, but a specific set of ingredients that must be combined, exhibited and experienced by others in order to be effective.

The Hay Group has worked for over 45 years to study, research, define and validate the key competencies that are learned and formed into Emotional Intelligence (EI). Those tested who demonstrate EI, consistently were rated as “Outstanding vs. Typical performers”.

I recently was trained as a facilitator of the Emotional Competence Inventory (ECI), a 360 degree assessment instrument that looks at how well you demonstrate the 18 overall competencies that make up Emotional Intelligence which is defined as “the capacity to recognize our own emotions, and those of others, for motivating ourselves, for managing emotions in ourselves and in our relationships.”

I experienced the assessment first hand, and gained tremendous insight into how I see myself and how others experience me. Like a sauce, there are 6 core competencies that must be included; Emotional Self-Awareness, Accurate Self-Assessment, Self-Confidence, Emotional Self-Control, Empathy, and Influence.

Of the remaining 12, a combination of 5 others will add up to EI.

So it could be Transparency, Optimism, Service Orientation, Developing Others, and Teamwork and Collaboration that get you the rest of the way, for a counselor or educator type.

Or a combination of Adaptability, Achievement, Initiative, Organizational Awareness, Inspirational Leadership, Change Catalyst and Conflict Management that complete the profile for an executive leader type.

Neither is right or wrong or better, they are just different displays of Emotional Intelligence.

Regardless of where your strengths are, with some added awareness, feedback, and learning, we can all sharpen our ability to inspire ourselves and others to greater performance.

If you would like to explore how to incorporate this assessment and development tool in your workplace as a performance improvement tool, please contact Luigi Pecoraro at 888.830.1904 x253 or lap@upsearch.com.