Counter Offers - they're back!

With job market conditions rapidly catching up with pre-recession levels of demand, we’ve seen a steady increase in the number of counter offers being used as a means to try to retain staff who’ve secured an offer elsewhere and tendered their notice.

As demand for staff rises, availability drops, and with employers focused on making the most of the economic recovery, retaining experienced staff is high on the agenda.

Good news for employees, not so good news for recruiters who, having invested a significant amount of time managing the process to this stage, can then experience last minute drop-outs from jobseekers who are persuaded to stay. A quick search online will throw up dozens of blogs and articles about counter offers, usually written by recruiters, quoting unsubstantiated statistics on the number of people who end up leaving their employer six to nine months after accepting an offer (usually between 80-95% - take your pick or, better still, read Mitch Sullivan's investigative blog on this subject). The overriding message being: don’t do it, take MY job!

There may well be a high proportion of individuals in this situation who do ultimately decide to move on after promises have been broken further down the line, but even so, unless there is a history from the individuals’ specific employer/line manager, I’m not sure this is relevant enough information to be basing important career decisions on.

For me, when a jobseeker decides to accept a counter offer, what this really tells me is that:

a) the other opportunity wasn’t good enough in the first place, or 

b) the candidate never really wanted to leave their employer, they just wanted better reward and commitment from them. Maybe they’ve discussed this with their manager and it’s fallen on deaf ears, or maybe they just feel this is the best way to force their hand?

I do however believe there is some truth in the often-stated claim that going through a counter offer process breaks a level of trust with an employer, especially if the employee had not raised any dissatisfaction previously. I also believe financial boosts alone are short term solutions that will often reoccur when the employees next salary review takes in to account the unplanned increase that’s already taken place.

From the employers perspective it’s also far from ideal. How will this affect the employees trust and buy-in to the business when it’s had to get to this stage? You can be sure at least one of their close colleagues will be aware of the situation and may now decide to go through a similar process themselves to increase their financial position.

In an ideal world, counter offers would never need to happen. Employers would regularly assess the ability, value and career aspirations of their staff and employees would have the confidence and opportunity to discuss any issues and frustrations openly. Jobseekers would only reach offer stage for positions they know they would be willing to leave their current employer for, and then, and only then, recruiters might then stop quoting those tired old statistics.

Talent retention via extended notice periods. Surely there's a better way....?

Today, I thought I’d share some frustrations I have with the misuse of extended notice periods by some employers, and the ill-feeling it generates, which can only be counter-productive in the long run.

It’s commonly accepted that those in management, highly paid, or specialist knowledge roles will need to sign an employment contract that requires the individual to serve a three month notice period. The reasons are justifiable, and rarely cause any problems for the individual when they come to leave, as future employers would generally expect to have to wait three months to secure the services of someone at an equivalent level.

The problem is when an individual is in a position or at a career level where it is extremely rare for someone to have a notice period any longer than one month. In these circumstances, the individual will face genuine problems securing their next move and will effectively be stuck with the following options:

·         Option 1: To accept the reality of seeing good opportunities pass them by whilst they try to find an employer who considers them to be so perfect for an opportunity that they’re happy to wait a full two months longer for them to start than they would for the next best applicant.

·         Option 2: To resign before securing their next position in the hope that they will be offered something suitable within the last 5-6 weeks of their notice period.

·         Option 3: To not honour their full notice period and risk leaving their current firm under a cloud after a month.

None of the options are attractive, and all of them are to the detriment of the individual’s future career. Option 1 will inevitably mean missing out on good opportunities, which will lead to compromise on the range of opportunities they would consider. Option 2 is throwing the dice; hoping that a suitable opportunity will arise within a specific timeframe and therefore also encouraging compromise. Option 3 could well lead to real problems further down the line, and would clearly damage relationships that have taken long to build.

The reasons for these unusually long notice periods that I’ve encountered is generally due to them having been introduced during negotiations between an employer and employee when the employer is attempting to retain them with a counter offer, or whilst appeasing a restless employee who feels undervalued, with a slight change in job title and a payrise.

It will of course only happen to individuals that an employer particularly wants to retain, and can seem at the time to be a tit-for-tat compromise during negotiations. Ultimately however, the introduction of an extended notice period is not going to encourage someone to stay with a firm if they want to leave, it just makes it difficult for them to do so and limits the career options available to them. Surely there are more positive ways to retain talent within an organisation? If not, wouldn’t it just be better to wave goodbye to a star performer on good terms rather than chaining them down whilst they grow resentful?