It’s a tight labor market out there right now, and I bet you are dealing with counteroffers every day. In the age of 3% – 4% unemployment, we need to be preparing our clients or hiring managers for the expectation that the candidate they are trying to recruit will receive a counter offer and how to deal with these annoying little buggers. Let’s face it; it’s never a good thing to hear “I got a counteroffer” especially when it’s followed by “I’m thinking about it.”
So how should the client or hiring manager handle a counteroffer? For starters, they need to be involved in every step of the process: from interview to offer to counteroffer. In fact, as a third-party recruiter, I typically give my client control over dealing with the candidate after I present them. That being said, if it’s a new client or one that has poor techniques I handle everything until I have them trained on how to be a good interviewer. Coaching is critical when working with hiring managers. That’s why it’s our job, as recruiters/sourcers to pre-qualify the candidates beyond “how much money do you want” and “why are you looking to leave” or “what are you looking for?”
As mentioned in How to Deal With Counteroffers: Part One: Candidates, I spend over an hour on the phone with all my candidates I end up representing. For that candidate story I used as an example, I spent ten hours total over a month and a half, which was easily the most time I’ve spent with a candidate. It is vital you develop a relationship with your candidates whether you’re in-house or third-party so they will come to you with their concerns or what’s going on every step of the way. But more importantly, it’s essential you know the pain points of the candidate because you’re going to have to tell that to the hiring manager to “coach” and prepare them for how to recruit your candidates, especially passive candidates. Recruiting is a team effort, and if everyone is doing their own thing, you’re only opening yourself up to unnecessary hurdles to jump.
After you’ve told the hiring manager all the key points to hit on in the interview process, make sure they also ask the questions you already asked. I find many times they will find out more information, sometimes more useful, than myself. The hiring manager knows the job and understands more about the technicality of their questions.
Moving onto the offer stage, it’s essential to have the hiring manager be the one to extend the offer. Have them call the candidate, not an email, to deliver a verbal offer initially. Have them listen to the candidates and see if there is hesitation with the candidate, etc. During the interview process, you and the hiring manager should have already gotten an idea of why the candidate is interested in the role, their aspirations, and their monetary desire. You should be doing your very best to extend an offer meeting these goals of the candidate. I’ve lost out on deals over $3,000 in expected salary. The client cried, I drank a bottle of wine, and months later we finally found another one who got the offer.
When delivering an offer, it’s key to prepare the hiring manager to expect a counteroffer from their current employer. This is why you want to have the hiring manager develop the relationship with the candidate while you step back and be a “hand holder” to help the candidate through the stressful situation of changing jobs. Your hiring manager is the one who this person will be reporting to, and it’s much harder for them to say no to them. It’s also better because it gives each party a chance to build on their relationship as they will be the ones working together. When the candidate can see how the hiring manager is they can better envision themselves in the role in the future so they will be less likely to entertain a counteroffer.
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Make sure your hiring manager has done one of two things: made the absolute best offer they can make first, knowing it’s the highest they can do and the candidate knows that as well. Or, we can go the “car sales” route and make an offer for less than your best but keep in your back pocket the “added perks” they can “get approved” to make the candidate feel like they won such as a sign on bonus, a higher salary, better vacation, etc. I personally believe in extending your best offer first, always. That initial offer dictates how the candidate feels about how you view them.
The candidate I had that turned down the $80,000 raise was great for me, but I also had another client offer a candidate a second offer $50,000 more than the initial offer because that candidate’s current employer made that counteroffer. The candidate was interested in leaving because of his company being bought out and he felt under appreciated with the new managers and undervalued. Well, the client showed him how much he valued him by offering him barely a 5% raise so when he got a counteroffer of $50,000 more he took it and didn’t even bother telling the President of my client why. I warned that client about his initial offer, he was the one who gave me the “buying a car” analogy that you don’t make your best offer first, you negotiate. I tried explaining that we’re dealing with the psychology of people but he didn’t care. It took a year to find another candidate for that role, and I’m not even kidding about that time-frame.
In conclusion, you should prepare your hiring manager from the first interview. Guide them through the interview process and extending an offer. Prepare them for a counteroffer and discuss the best strategy on how to prepare, as every candidate is different. Let everything happen and your managers learn through experience. Don’t be afraid to speak up to your hiring managers: you’re the expert, act like it! Don’t let them walk all over you, don’t let them tell you they know what they are doing, etc. Remind them this is a team effort, and you’re there to assist.