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.

Salary Surveys: pay close attention!

It’s the time of year again when HR departments are busily analysing market salary data and employees are discovering whether they will be happy or frustrated when learning of their annual pay reviews.

For employers it’s crucial that they have an informed understanding of what constitutes ‘market rate’ salaries for all the various positions they employ within their business. Equally it’s just as important that individuals know their market value relevant to their responsibilities, qualifications and experience.

That’s not to say that salary surveys provide an individual with proof that they are ‘worth’ a certain salary. But they do give guidance on what a future employer might expect them to be earning, which can be of huge importance. Rightly or wrongly (in my view: wrongly!), a fair proportion of prospective employers will consider an individual’s current salary when considering what they feel is a fair offer to attract someone. If they’re already well below market rate, they might be happy to take any payrise even though it is still below the market average.

Therefore, if you find yourself being paid a salary lower than your peers, you may well find that this sticks with you for the duration of your career (unless you do something to address it), which can amount to a considerable sum – more than you might be consciously willing to forego in favour of good team morale, convenient location and stability.

Of course, I wouldn’t advocate marching in to your line manager and demanding a pay rise but, if you haven’t already, it may be sensible to raise this as a topic for conversation during appraisals/reviews at an appropriate time. If you come to the realisation (or are informed) that your current employer knowingly pays at the lower end of the market, you should really consider the potential long term difference in earnings rather than just the next 12 months and based on this decide whether it’s an amount you’re happy to sacrifice or whether you might want to start looking to increase your salary elsewhere.

I’m currently conducting a salary survey in association with the Institute of Legal Finance & Management (http://www.ilfm.org.uk/) for the niche area I recruit for – accounting staff working for law firms. If you’re working within this area, please click the link and participate!

Career progression or just more money?

When discussing a jobseekers motivations for looking for a move, two of the most common reasons I hear are career progression and for a payrise. The two are closely linked, with the first generally taking care of the latter, but too often they are confused as one and the same thing.

In many circumstances it seems that a jobseekers idea of career progression correlates to earnings and earnings alone. Understandable that this is seen as a positive move, but if you’re really looking for career progression, the salary of your next position shouldn’t really come in to the equation. Naturally, very few of us are prepared to take a drop in salary, but when considering your career earning potential, the salary you earn over the next 12 months will have little to no bearing on what you might be earning in a few years time. It’s the work itself that will make the difference.

If you want to significantly increase your earning potential, be patient and don’t focus on what your monthly income will be over the coming year. Think about what your earnings will be over the next 5-10 years. A position paying £3k more than another has the short term appeal of the higher salary, but as a stepping stone will the position itself help you climb to the next step up in your career faster than the other? Of course it could, and if so – result! If not however, the role with the lower salary but better development could be the sensible option.

Consider a Sliding Doors situation. On one universe you take the role paying £3k more and 5 years down the line you’re doing the same job as you are now and are again looking for a step up in your career. Meanwhile in the parallel universe the other you, who took the lower paying role, has already gained 5 years experience in a more senior position, developing their skills and experience accordingly. Chances are they’ll have already overtaken your earnings and now they also start looking for a new job, but in this scenario they’re looking for a job two steps higher up the ladder than you are. If they stay on their toes they’ll remain the higher earner right through till retirement and their overall career earnings will dwarf yours.   

Of course, it’s not always as clear cut as in this example, and it’s not every day we find ourselves with two job offers on the table. However, the same logic should be applied if after resigning your current employer tries to persuade you to stay by matching the salary on offer elsewhere. A short-term win perhaps, but how will staying affect the long-term path of your career?