A Recruiter’s Guide to Managing Counter-Offers

A recruiters guide to counter offers

Counter-offers are part and parcel of recruitment, and don’t believe anybody that tries to tell you that they’re completely avoidable – they’re not. Having said that, there are several techniques you can adopt to significantly reduce the risk of counter-offers during the recruitment process.

As a Recruitment Consultant, this blog will equip you with the tools required to successfully manage counter-offers when they do happen and increase your chances of coming out on top.

What is a counter offer and why do they happen?

You have interviewed a fantastic candidate, you offer them the job, and everybody is happy. That’s the ideal scenario. A counter-offer is when the candidates existing employer reacts to their resignation by offering them something seemingly better. This typically comes in three forms:

More money – This is the most common counter-offer as it’s very easy to forget the issues you’re having at work when you’re offered a sizeable pay rise – at least temporarily.

Promotion – It’s surprising how quickly a candidate can be promoted following a resignation. It may have been the title they always wanted, and it’s good for the ego.

Benefits – From your own parking space to qualifications, company cars and annual bonuses, additional benefits often play a part in a counter-offer.

As well as the ‘you don’t know what you’ve got ‘til it’s gone’ mentality, there are many reasons as to why an employer may counter-offer. Including:

The cost of recruitment and training – It’s estimated that training a new employee can cost anywhere from 20% to 40% of their yearly salary. This combined with any potential recruitment fee on top, makes a counter-offer a much more cost-effective option.

Loss of income – If somebody isn’t doing the job, there’s a reduction in output which can delay projects or production. Businesses will want to retain existing employees to avoid this happening.

Pride – How would you feel if one of your best employees wanted to leave your business for another, or even worse, a competitor? There can definitely be an element of ego involved in counter-offers.

The downside of counter-offers

Counter-offers are frustrating for both the new employer and the recruiter involved, and it can often feel like an impossible task to compete with a generous pay rise or promises of promotion.

If our 50 years of experience has taught us anything, it’s that the counter-offer scenario rarely has a happily ever after. We have seen a large number of candidates looking for a new job again within 6 months of accepting a counter-offer, and this is typically for the following reasons:

Back to the status quo – The short-term gain doesn’t last forever, and the reason you were looking for a new job in the first place creeps back in, resulting in frustration.

Promises aren’t kept – Sometimes, despite the best intentions, businesses can’t follow up on the promises made during a counter-offer for a multitude of reasons.

Hostility – Although less common, accepting a counter-offer can result in hostility from colleagues. No matter how much discretion is involved, they’ll often know that you received a pay raise or a promotion because you resigned.

We’re not claiming that every counter-offer situation ends badly, but more often than not, candidates we talk to have experienced one or several of the above.

This knowledge is valuable when it comes to managing a counter-offer with a candidate, even before it arises. Remember to ask questions in the early screening process to minimise the risk and understand the real reason they’re looking to move jobs. If a candidate’s primary motivator is money, it’s much more likely they’ll quickly accept a pay rise from their current employer. If it’s company culture, their boss, or similar frustrations, it tells you that there’s less chance of a counter-offer.

We also recommend simply asking the question – how would you feel if your employer made you an offer to stay? This will help you to gauge their reaction.

Managing a counter offer

Recruiters get a bad rep, but we all want what’s best for our candidates. Placing our candidates into the wrong jobs is counterproductive, it means more work replacing them, a bad reputation and severed relationships with both candidates and clients.

Building a good enough rapport with candidates will allow you to truly assess whether they’re making the right decision for them when accepting or refusing a counter-offer. Knowledge of your sector and the businesses within it also helps – you may start seeing a pattern of frustrations from candidates from the same business. This usually indicates that a counter-offer is a temporary fix, and the information in this blog will help to shape your conversations as to why.

On the other hand, a business may learn the error of its ways after a resignation and things may markedly improve afterwards, it can happen, and every situation is unique. The important thing is understanding why counter-offers happen, what they typically are and why they may not work out so that you can deal with the situation when faced with it.

Recruitment jobs

Looking for a new job in recruitment? Want to know more about the role of a Recruitment Consultant, what a Recruitment Consultant does or a day in the life of a Recruiter? We’re always on the lookout for ambitious recruiters to join our teams in Derby, Leicester, London and Leeds.

We have an unrivalled training programme that will give you all of the tools you need to be successful – not forgetting our generous basic salary, uncapped commission and fantastic progression opportunities! Contact our Talent Acquisition Manager, Rachael Bailey, below for an informal chat about a career with ATA Recruitment.

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