The Counter-offer Challenge
Confront and Overcome the Counter-offer Challenge

Counter-offer Landscape

We have begun to lose candidates to dot.coms that offer low salaries but very high options, or "excitement," and to companies and recruiters that our own candidates locate by themselves on the Internet. (One recent candidate of ours even made his own counter-offer: he proposed to contract at double salary to his old employer.) The Internet also offers "flexible work alternatives" (FWA) and the ability to work from home, while giving the appearance of multiple opportunities at ludicrously inflated salaries. In an era characterized by low unemployment and high demand for candidates, turnover is down to 2-3 years and candidates, who now know about all of the opportunities on their own -- even if they can't close them feel less guilt about leaving a company than they once did because moving on has become so common.

Sharing with the Client

I suggest that you sketch this landscape for your clients, who will then begin to appreciate that your knowledge of the changing marketplace and candidate psyche make it more likely that you will be able to find and place candidates for them from among the top 20 percent. Tell them that women are no longer surging into the workforce; that white collar productivity impact has flattened; that immigration levels are stable; that executives are shortening, not prolonging their careers. Mention that when Jack Welch met with Home Depot to help acquire their work, he brought two HR executives with him, because building the bench is so critical.

As you interact with clients, remember that they are also having trouble in the new world of recruiting. Fifty percent of placements accepted in Silicon Valley don't show up on the first day of work! (My company no longer deletes a job from our system until a month has passed after a placement. We frequently follow up with the hiring manager a week after the no-show was to have started, and we often get the same job order back.) You should tell a client suffering from this sort of treatment and they all are -- that you screen for counter-offers right from the first contact with the candidate. And you should also tell the client your ratio of acceptance/turndown/no show in order to give him or her a sense that you can deliver.

Be sure to emphasize to clients the importance of the "F' word in fighting counter-offers-- how the client FEELS about the job. This means that the client should tell you as much about the job as he can so that you can sell it better. Such information, in turn, impels the client to rely on you more than ever. Companies hate to give you inside information access to their managers, but we tell them that if we can't speak to managers and get a sense of pace and personality, we can't fight counter-offers and won't work the job.

Prevention

We begin counter-offer prevention by asking the new lead, in our first e-mail or phone contact, what his counter-offer experience has been. We ask: What if the reason for leaving (RFL) is resolved? This question is most important for candidates from the Internet because they have so many choices and get so much more stroking from recruiters and employers. We have less time to build relationships with them. In any case, with each phone call and e-mail, we document the RFL, review counter-offers, money, and factors that seem to be most important emotionally about the job. We point to counter-offer information on our website in order to show how common counter-offers are. We discuss website resignation tips in our first letter to the candidate. And we watch for candidates who have never voluntarily resigned, but who have been riffed, relocated, gone out on maternity leave, or come from a first job. Such people are inexperienced at resigning and are more likely than others to remain loyal to the employer.

Other danger signs to watch out for in candidates' reasons for leaving are: "wrong boss," "not enough money," "inadequate bonus," and "wrong technologies." Such complaints are usually easy for the company to resolve. We help the candidate articulate reasons for leaving that the company cannot resolve, such as the very culture of the organization.

At the conclusion of the interview I say: "So, if I find a position for you that includes the characteristics you want, at a fair and reasonable salary, and you're excited about the people in the company, I can be fairly certain that you'll turn down a counter-offer of a 20 percent raise and the promise of an internal promotion this year. Is that right?"

I also remind the candidate that accepting a counter-offer is like a girl giving the wrong buy signs on a date -- it sours the relationship: first she says "yes"... then "no"... then "maybe." The candidate believes that the relationship with the old company will not sour in light of his having sought another job. But I tell him it will, that I've seen it happen in his very company. I also say, concluding the first interview: "I will share with you the name of every place I submit your resume, before I submit it, so that you are in control of your search. Is that fair? Also, I need to know what you are doing on your own so that I am not creating opportunities for you that you have already turned down. I'd rather invest my time for you in companies you do want. Now, where have you already been?" This helps me understand why they turned down certain jobs and how to close them.

Techniques

Early on, show the candidate how to ask for a counter-offer before his or her first client interview. The script might be: "I've been getting calls from headhunters with very attractive opportunities, and although I'm not interested, I'm curious as to just what my value and career path is. I really want more money, and a new technology to work on. Should I listen to the headhunters?" If you lose, and the client gets the counter, you at least minimize your time spent. And if you help a candidate get more money by staying with the old company, his or her gratitude usually leads to referrals.

When close to an offer, I ask the candidate to write a resignation letter. If the candidate can't bring himself to do it, I know that he has issues, and I work with him to surface them. If the candidate has multiple offers, he tends to trust me more, to be more candid, and to rely more on my advice in evaluating the competing choices.

Describe the resignation process to the candidate. Write him a letter of congratulations in advance of the deed. Contrast the manager's problems with resignation and the demands of the candidate's career path, and use a to-do list to take the focus off of the resignation. Reiterate the major problem stemming from acceptance of the counter offer: by seeming to be in bed with a new company while married to the old one, the candidate will never be trusted again. Tell the candidate the cost of his contractor replacement: the replacement would need an 80 percent increase, and no client has ever offered an 80 percent counter. Compare that to the cost of a lunch with a vice-president trying to keep the candidate from leaving.

At offer time, ask the hiring manager to have his or her team members each e-mail congratulations to the candidate, speak about new projects, and tell about technical training available. It must be made clear to the candidate that it is he who owns the management of his career, not the manager of his old company to whom he must deliver a letter of resignation. When the candidate actually delivers the letter, he should say what it is, that it will take effect soon, and that the reason for leaving has nothing to do with the manager. The candidate should also hand the manager a second letter which contains a bulleted list of what the candidate needs to accomplish in the final few Weeks in his current position. This provides a crutch for the manager, who is struggling to respond to the news, believing that he will look bad to his own boss for losing the candidate as an employee. The candidate must also say, unasked: "I don't want a counter-offer." The candidate must use an excuse -- "I'm too busy with work"-- to avoid going to lunch or otherwise getting involved in discussing the resignation with management.

It is important that the candidate always be acutely aware of his reasons for resigning and use them as armor against his own remorse or doubts engendered by others. The candidate should laminate a copy of the resignation letter and keep it in his daytimer, and put one by his phone. Indeed, there should be a copy of a resignation letter on your website, in your congratulations card, in your interview room. Its essence cannot be reinforced too often.

Hand-holding throughout the traumatic and tricky process leading from first thought of resignation to accepting and remaining in a new placement is clearly important. Call and have lunch with the candidate both before and after the resignation, and follow up in a month. Don't risk losing him. But if you do the kinds of things suggested here, it is likely that your ratio of counter-offers to acceptances will be overwhelmingly in your favor.

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