Navigating Counter Offers: A Behind-the-Scenes Look from an Executive Recruiter

Last updated Jun 6, 2023
  • The decision to accept or reject a counter offer should be carefully evaluated based on individual circumstances and long-term career goals, considering the potential advantages and drawbacks.
  • Executive recruiters are important for helping candidates with counter offers as they provide guidance and support, helping candidates make informed decisions based on their unique circumstances and career goals.

According to Harvard Business Review, 40% of senior executives and human resources (HR) leaders agreed that accepting a counter offer from a current employer can harm one’s career. However, 78% of senior executives and 80% of HR leaders stated that embracing a counter offer can sometimes be acceptable. 

Nevertheless, it is challenging to determine the specific circumstances in which accepting a counter offer is appropriate, as each case is unique according to additional interviews with transitioning executives and chief HR officers.

Faced with this situation, many companies may feel compelled to make a counter offer as their only viable solution to tackle the challenges a highly competitive executive candidate market presents. 

Surprisingly, they are not alone in this line of thinking. Despite numerous articles advising candidates against accepting counter offers, there has been a notable increase in the frequency of counter offers being made and accepted by executive candidates. 

This trend poses a significant challenge for companies seeking to attract top talent, making it crucial for them to learn how to mitigate the temptation of counter offers and ensure successful executive hiring.

What is a Counter Offer?

A counter offer is a reply provided in response to an initial offer. It indicates that the original offer has been declined and replaced with an alternative proposition. A counter offer presents the original offeror with three choices: accepting the counter offer, rejecting it, or presenting a new offer.

counter offers are commonly encountered in various business negotiations, transactions, contracts, and private and public agreements between two individuals or entities.

The Truth Behind Counter Offers: Insights from an Executive Recruiter

In today’s competitive job market, candidates often face counter offers when they decide to leave their current employer. 

As an executive recruiter, it is important to provide valuable insights to help candidates make informed decisions. In this article, we will explore the advice and perspectives of professionals on the realities of counter offers in the recruitment industry.

Top Candidates Have A Lot of Options

When top candidates are faced with counter offers, it is advised by hiring professionals to avoid making rushed decisions or expediting the selection process. Instead, focusing on the role and the overall candidate pool is recommended. 

Taking a step back, remaining calm, and evaluating the situation can lead to a more informed and strategic decision-making process.

Taking It Slowly

Most executive recruiters advise against rushing the hiring process when highly sought-after candidates inform of other offers. 

Taking a step back and avoiding hasty decisions is important to prevent potential bad hires and internal conflicts. 

For focused and successful recruitment, recruiters recommend targeting candidates with a genuine interest in joining the team. Exceptions can be made, however, for exceedingly talented individuals with the potential to significantly elevate your business.

Compile the necessary information

According to Scott Rivers, the president and managing director of Cerca Talent+, when a candidate receives another offer, executive search professionals must approach the situation with contemplation rather than impulsivity. 

If the candidate is ranked lower in the selection process or has multiple rounds remaining, it is advisable to guide them to accept the other offer. 

However, if the candidate is a top contender, Rivers suggests discussing important factors like decision criteria, compensation expectations, and response deadlines. 

This information can then be shared with the hiring team to determine whether expediting the process is necessary. 

Maintaining transparency during these conversations is key to gaining insight into the candidate’s thinking process and preserving or enhancing the company’s employment brand.

Retention Tactic

As an executive search professional, it is important to acknowledge that counter offers are frequently employed as retention tactics by employers aiming to retain valuable employees. 

These counter offers may involve salary increases, promotions, enhanced benefits, or other enticing incentives to persuade the candidate to remain with the company. 

However, it is crucial to critically evaluate why these improvements were not offered earlier when the employee was not contemplating leaving. 

This raises questions about the employer’s proactive approach to employee satisfaction and whether the counter offer genuinely reflects the employee’s value or is merely a temporary solution to address the immediate risk of losing them. 

Executives and candidates should carefully consider these factors and the long-term implications before deciding between counter offers.

Future opportunities

Accepting a counter offer can create challenges for employees in pursuing future opportunities within the company. 

Their decision to accept the counter offer may raise doubts about their loyalty and commitment, hindering their career progression. 

The perception that they were actively seeking employment elsewhere might make it harder for them to be considered for promotions or other growth opportunities within the organization. 

It is important for employees to carefully consider the long-term implications before accepting a counter offer and evaluate whether it aligns with their career goals and aspirations.

Future Layoffs

As an executive search professional, it is important to inform candidates that accepting a counter offer does not guarantee long-term job security. 

Companies often utilize counter offers as a temporary strategy to retain employees while they navigate transitions in responsibilities or search for suitable replacements. 

In cases where the company faces financial challenges or other compelling factors that necessitate future layoffs, accepting a counter offer may not provide the desired long-term protection for the individual. 

Candidates must consider the broader context and potential risks before deciding based solely on a counter offer.

Related: Executive Headhunters: Friend or Foe?

Pros and Cons of Counter Offers

counter offers can be a common practice in employment negotiations when employees receive a job offer from another company, and their current employer makes a counter offer to retain them. 

Like any decision, counter offers come with both advantages and disadvantages. Here are some pros and cons to consider:

Pros of counter offers:

  1. Salary and Benefits: counter offers often involve an increase in salary or benefits to entice the employee to stay. This can provide financial incentives and improve overall job satisfaction.
  1. Job Security: By accepting a counter offer, employees may feel more secure in their current position. They can maintain their existing relationships, projects, and job stability, which may be appealing.
  1. Career Development: counter offers may include promises of career advancement opportunities, training, or mentorship programs. These can enhance the employee’s professional growth prospects.
  1. Negotiating Power: Receiving a counter offer can give the employee more leverage in negotiations with the new employer. They can use the counter offer to seek better terms or benefits from the new company.

Cons of counter offers:

  1. Trust and Loyalty: Accepting a counter offer may strain trust and loyalty between employees and their current employer. The initial decision to seek new opportunities might be viewed negatively, potentially affecting future opportunities and relationships.
  1. Job Satisfaction: counter offers might address only the financial aspect, ignoring other factors that led the employee to consider leaving. If the underlying issues that caused the employee to search for a new job are not resolved, job satisfaction may continue to be an ongoing concern.
  1. Career Progression: Accepting a counter offer could limit long-term career progression, as opportunities for advancement might be more readily available with a new employer. Staying in the same role may hinder the employee’s professional growth.
  1. Perceived Value: Accepting a counter offer could lead to a perception that the employee is solely motivated by financial gain rather than personal growth or company mission. This perception might impact future opportunities or limit the level of trust placed in the employee.

Accepting or rejecting a counter offer depends on individual circumstances, personal priorities, and long-term career goals. It’s essential to carefully evaluate the pros and cons and consider the potential consequences before choosing.

Factors to Consider When Evaluating Counter Offers

When assessing counter offers, it’s important to take into account various factors, such as the job offer details and your own priorities.

Examine the Underlying Purpose or Motivation Behind the Counter Offer

Executive search professionals understand that employers may extend counter offers to retain valued executives for various reasons. 

While some counter offers genuinely reflect the employer’s appreciation and desire to retain the executive’s contributions, other factors can be at play. 

For instance, employers may be motivated by the convenience of avoiding the recruitment and training process for a replacement. 

They may also seek to retain the executive’s expertise and prevent them from joining a competitor. 

Recognizing the underlying intentions behind a counter offer empowers executives to make informed decisions about whether accepting it aligns with their long-term career goals.

It is not always the money

When evaluating a counter offer, it is crucial for an executive search professional to emphasize that monetary considerations should not be the sole determining factor. 

They should encourage their clients to assess the authenticity of the employer’s recognition of their value and career growth opportunities. 

In addition, the executive search professional should advise their clients to consider the overall package, which includes non-monetary benefits, and to remain mindful of any potential underlying issues within the company that may persist despite a salary increase.

Evaluate the Advantages and Disadvantages of Your New Offer by Carefully Considering the Pros and Cons

The executive search professional advises the individual to carefully evaluate the advantages and disadvantages of the new offer they have received. 

They emphasize the importance of considering the alternative offer from the prospective employer and comparing it to their counter offer. 

The professional suggests assessing which opportunity is more likely to fulfill the individual’s long-term career aspirations. 

While it may be tempting to stick with the familiar, they caution against letting hesitation prevent them from pursuing a job change. 

The professional points out that a new position has the potential to provide greater avenues for advancement and a company culture that better aligns with the individual’s personality, goals, and values.

Seek Advice

Executive search professionals recommend seeking impartial advice when faced with a decision regarding a counter offer. 

They advise contacting colleagues and friends to gather different perspectives on whether the counter offer is sufficient to maintain job satisfaction. 

These individuals are likely to be familiar with any past issues or concern the person has had in their current job and can remind them of previously expressed complaints.

In addition, we suggest discussing the offer with an executive search professional, like Curran Daily, if one is involved in the process. 

Given our expertise in the recruitment sector, we have encountered various counter offer scenarios and can provide insights on factors that may have yet to be considered.

Executive recruiters like us are vested in helping the individual make an informed decision, as recruiters aim to match candidates who will be a good long-term fit for employers. 

Recruiters must assist in ensuring the individual commits to the right choice, as a premature departure could potentially harm their reputation with the employer.

Take a Fresh Look at the Factors that Led to Your Decision to Leave

When faced with an appealing counter offer, the executive search professional emphasizes the importance of reevaluating the reasons behind considering a job change. 

They remind individuals that there were likely valid and significant factors that initially motivated their search for a new job, which extended beyond monetary considerations. 

The professional prompts individuals to reflect on potential conflicts with a manager, unhappiness and lack of enthusiasm, excessive pressure, an overwhelming workload, or a sense of career stagnation.

Moreover, the professional advises individuals to carefully assess whether the new job opportunity has the potential to address these underlying issues. 

They caution against allowing the allure of a counter offer’s financial incentives to overshadow the essential need to resolve the fundamental challenges that prompted the job search in the first place. 

The professional advises that if the new job is perceived as more likely to solve these issues, no amount of money within a counter offer should be persuasive enough to convince the individual to remain in their current position.

Rely on Your Instincts and Intuition

The executive search professional encourages individuals to trust their intuition when deciding about job offers and counter offers. 

They acknowledge that every decision carries a degree of uncertainty and that one can never be certain about what awaits them in a new job. 

Similarly, they highlight the possibility that a counter offer from the current employer may address previous concerns.

After carefully evaluating the pros and cons, the professional suggests that individuals often have a sense of where their true desires lie. 

They emphasize the importance of trusting this intuition and avoiding decisions solely driven by financial considerations. 

Furthermore, the professional promptly informs both the current and new employers of the decision once it has been made.

The Role of the Executive Recruiter in Counter Offers

The role of an executive recruiter in counter offers can vary depending on the specific circumstances and the relationship between the recruiter, the candidate, and the hiring company. 

Here are a few aspects to consider:

  1. Candidate representation: When a candidate engages an executive recruiter to explore new job opportunities, the recruiter represents the candidate’s best interests. They work closely with the candidate to understand their career goals, preferences, and motivations for seeking a new position. Throughout the recruitment process, the recruiter aims to secure the best possible offer for the candidate.
  1. Identifying counter offer risks: A counter offer is a proposal made by a candidate’s current employer to encourage them to stay after receiving an offer from another company. Executive recruiters are familiar with the potential risks associated with counter offers. They understand that accepting a counter offer may only sometimes be in the candidate’s best interest and can provide advice and guidance on the potential implications.
  1. Educating the candidate: The executive recruiter needs to educate the candidate about the pros and cons of counter offers. They can discuss why the candidate decided to explore new opportunities in the first place and help them weigh the potential benefits and drawbacks of accepting a counter offer. This helps the candidate make an informed decision.
  1. Negotiation support: If a candidate receives a counter offer, the executive recruiter can provide negotiation support. They can help the candidate navigate discussions with both the hiring company and their current employer. This may involve clarifying the candidate’s priorities, addressing concerns, and facilitating communication between the parties involved.
  1. Objective perspective: The executive recruiter can offer an objective perspective throughout the counter offer process. As a neutral party, they can provide insights and advice based on their experience working with both candidates and employers. This can help the candidate make a more balanced and informed decision, considering both short-term and long-term career goals.

It’s worth noting that the involvement of an executive recruiter in counter offers may vary. 

Some candidates may choose to handle counter offers directly with their current employer, while others may rely on the guidance and support of their recruiter. 

The recruiter’s role is to assist the candidate in making the most advantageous decision based on their unique circumstances and career aspirations.

How to Deal With Your Candidate With Multiple Counter Offers?

When managing candidates with multiple job offers, it is essential to prioritize effective communication by asking relevant questions and attentively listening to their responses instead of displaying disappointment. 

Competing can be particularly challenging if a candidate has already received their desired job offer.

Furthermore, various executive recruiters caution against proceeding with a candidate who accepts an offer but subsequently presents a competing offer with higher pay. 

This approach is discouraged due to concerns about integrity and commitment.

Additionally, it has been observed that candidates who engage in extensive negotiation during the hiring process may not yield satisfactory results. 

While it is normal for candidates to consider other offers, it is important to refrain from exerting forceful persuasion or enticement.

Hiring managers should maintain a strong focus on finding the most suitable individual for the job at hand. If a candidate ultimately chooses to accept another offer, it signifies that they may not have been the ideal fit for the position.

Final Thoughts

Deciding whether to accept or reject a counter offer depends on various factors. 

While they offer financial incentives and job security, they also pose risks like limited career advancement and strained trust. Both candidates and companies should carefully weigh the pros and cons, seeking advice and trusting their intuition. 

An executive recruiter can be crucial in representing the candidate’s best interests. Effective communication and focusing on finding the most suitable candidate are vital in today’s competitive talent market.

Are you facing a counter offer dilemma?

Let Curran Daly & Associates assist you in navigating the complexities of counter offers. Our team of recruitment specialists is well-versed in the challenges posed by counter offers and can provide valuable advice tailored to your unique situation. 

Whether you’re a candidate considering accepting a counter offer or an employer grappling with the impact of counter offers on your hiring process, we’re here to help.

With our expertise in the latest recruitment trends and insights, we can guide you through decision-making and ensure you make an informed choice. We understand the potential risks and benefits associated with counter offers, and we can help you weigh the pros and cons based on your long-term goals and priorities.

At Curran Daly & Associates, we prioritize effective communication and understanding your individual needs. Our goal is to support you in achieving the best outcome, whether it’s securing top talent or making the right career move.

Don’t let counter offers create uncertainty and confusion. Contact Curran Daly & Associates today to gain clarity and make informed decisions.

References

Grensing-Pophal, L. (2020, September 18). When Top Candidates Have Another Offer. SHRM. https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/when-top-candidates-have-another-offer.aspx 

Kay, K. O. (2019, February 20). If You’re About to Take a New Job, Should You Consider Your Boss’s counter offer? Harvard Business Review. https://hbr.org/2019/01/if-youre-about-to-take-a-new-job-should-you-consider-your-bosss-counter offer 

6 Things To Consider When Dealing With A Counter Offer. (n.d.). Exacta Solutions. https://www.exactasolutions.com/counter-offer/ 

By: Curran Daly + Associates

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