Counteracting counter offers: A proactive approach to securing top talent

November 6, 2023

Candidate and interviewer shake hands

In the competitive landscape of talent acquisition, businesses often find themselves in a tug-of-war for top-tier talent

The journey from identifying the right candidate to successfully bringing them on board is fraught with challenges, none more so than the dreaded counter offer from a candidate’s current employer. This phenomenon, a testament to the candidate's value in the market, requires employers to be strategic, agile, and above all, prepared.

Understanding the motivations that drive individuals to consider new opportunities is crucial. Are they seeking better compensation? A more fulfilling role? Or perhaps a healthier work-life balance? Knowing this can help businesses ensure they stand out not just on financial terms but in meeting the holistic needs of the candidate.

Here is a breakdown of the sections covered in this article:

Efficient candidate engagement and swift onboarding enhances productivity and reduces company costs

According to research from the Society of Human Resources Management (SHRM), businesses should expect to spend up to three or four times the position’s salary for each hire, with the possibility of an added 60% in “soft costs” (basically time from managers, HR personnel and others involved in the hiring process).

In this article, we will guide you through creating transparent and expedient hiring processes, understanding candidate motivations at a deeper level, and observing market trends to inform competitive offers. We will also delve into the art of communication, highlighting how a robust dialogue between you and your candidate can fortify your position and mitigate the impact of a counteroffer.

Read on as we unravel the complexities of counter offers and arm you with the knowledge and strategies needed to emerge victorious, ensuring that your chosen candidate becomes a valued member of your team.

What is a counter offer?

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A counteroffer arises in the realm of employment when a candidate receives an alternative job offer, prompting their existing employer to present a competitive bid in an effort to retain or secure their services. This can encompass an enhanced salary package, additional benefits, a revised job role, or other perks aimed at making the position more enticing.

Counteroffers serve as a strategic tool for employers to express the value they place on the individual, essentially saying, “We recognise your worth, and we’re willing to up the stakes to have you on board.”

However, while they can be an effective method of talent retention, they also necessitate careful navigation, as they introduce an additional layer of complexity to the negotiation process, with potential implications for the employee’s future within the company and the broader dynamics of the workforce.

Why do employees consider leaving their jobs?

The decision to leave a job often intertwines both psychological and financial motivations. While our intrinsic needs for growth, recognition, and belonging—concepts anchored deeply in models like Maslow's Hierarchy of Needs—play a pivotal role, the tangible aspect of financial remuneration cannot be sidelined. A survey conducted by the Pew Research Center revealed that “low pay” and “no room for growth” are the most cited reasons for why someone would consider leaving their jobs.

It's not uncommon for individuals to feel that their financial compensation doesn't reflect their skills, effort, or the market value of their role. Such disparity can lead to a heightened sense of undervaluation and breed resentment.

“I think that the majority of people that consider leaving their jobs, feel that they’re not valued. So at that point, how do you make them feel valued again?”

Tennille Hall - Talent Acquisition Director at Airswift.

Benefits and perks—or the lack thereof—can also weigh heavily on the scales of job satisfaction. Psychologically, the desire for meaningful work, a more inclusive or positive company culture, and new challenges are potent drivers for change. 

On the relationship front, strained workplace dynamics can erode the sense of belonging that is vital for job contentment. The mental toll of burnout, resulting from stress or misaligned job expectations, further exacerbates the urge to seek greener pastures. In essence, whether driven by the wallet or the soul, the decision to depart from a job usually emerges from a desire for a future where both material and emotional needs are better catered to.

Is letting go better than a counter offer?

While counter offers can be seen as a tool to retain valuable employees, they aren't always the right answer. In some situations, the underlying reasons for an employee's intent to leave may be deeper.

In fact, some managers like Tennille think that sometimes, the best thing is to let the employee go and not try to negotiate.

I’ve been staffing for 23 years and I’ve never made a counter offer to retain my employees. I think that when you’re at that point of considering leaving, It’s better to let your people go and figure it out by themselves.

But that doesn’t mean that she neglects her staff. “The “boomerang employee” is a real thing.  These are individuals who leave an organisation and then, at a later date, decide to return to work for the same company. This phenomenon has become more common in today’s dynamic job market, and it presents unique challenges and opportunities for employers.

“I’m very happy to rehire someone that was very important to my team, left for whatever reason and wants to come back. I keep track of a lot of good people, and if they’re interested, my door is always open” she adds.

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Why is it important to set clear expectations from the start?

In the high-stakes arena of talent acquisition, the initial phase of recruitment is not merely a process—it's a pivotal moment that can shape the trajectory of subsequent negotiations.

This sentiment is echoed by Larissa Santos, Talent Acquisition Partner at Airswift:

Both candidate and recruiter have to be aligned with salaries and benefits offered from the start. It’s the first step when recruiting. Otherwise, it can lead to unnecessary back-and-forth in negotiations.

Starting off with clear and aligned expectations ensures mutual understanding between the company and potential employees, streamlining the hiring process and preventing future misunderstandings, especially concerning compensations and benefits. This misalignment can lead to mistrust and make the employee susceptible to counteroffers.

Beyond monetary aspects, setting clear expectations also includes clarifying role responsibilities, growth opportunities, and workplace culture. Providing candidates with this comprehensive understanding fosters trust and security, diminishing the appeal of counteroffers.

How does effective communication impact talent attraction in today's workforce?

Effective communication is a cornerstone of talent attraction and retention, forming the bedrock of trust, comprehension, and respect between candidates and hiring managers. Its role is critical not just for the exchange of information but as a strategic tool for talent management. Grammarly's report that American businesses lose a whopping USD 1.2 trillion annually due to ineffective communication underscores its economic impact.

Consistent and transparent dialogue is essential during the early stages of a business's talent engagement strategy. It lays out clear role expectations and performance goals -  mitigating confusion and elevating confidence in the orgasiation. This clarity is a key factor in a candidate's decision to accept a job offer, reducing the chances of them considering a counter offer. Frequent communication also creates an environment where continuous feedback is the norm.

The power of effective communication especially shines when it helps employees envision their future with the organisation. Regular, meaningful conversations with their managers provide a window into possible career advancements, skill development, and forthcoming prospects. With this insight, employees are more likely to feel engaged and committed, pursuing opportunities for growth that align with their professional goals.

In the dynamic landscape of modern employment, where job switching is commonplace and loyalty is not a given, genuine communication stands out as a key differentiator. It helps employees feel acknowledged and appreciated, fostering a connection to the organization's mission and their place within it. 

How to navigate counter offers from current employers: A guide for prospective employers

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When a top candidate receives a counter offer from their current employer, it demands careful and strategic handling. This juncture tests both the attractiveness of your initial offer and the relationship you’ve built with the candidate. Here’s how you can effectively handle such situations:

Reaffirm the candidate’s value

Immediately express how much the candidate means to your organisation. Highlight the unique opportunities, the potential for growth, and the value they would bring to your team.  Research from the Washington Post shows that there has been a 20% increase in ghosting from candidates and newly hired employees. Reinforcing the candidate’s worth in your eyes, and showing that your interest goes beyond filling a vacancy can make a difference.

Ask open-ended questions

Engage the candidate in a conversation to understand their perspective and motivations. Ask why they're considering the counter offer, what aspects are appealing to them, and what reservations they might have about joining your company. This dialogue can provide valuable insights and guide your next steps.

Be ready to renegotiate

While it’s not always about increasing the financial package, be open to negotiate your offer if faced with a substantially better counter offer. Ensure that any enhancements to the offer are justified and reflect the candidates' worth to your organisation.

Highlight non-monetary benefits

Draw attention to the aspects of your offer that go beyond salary. This could be the company culture, career development opportunities, work-life balance, or any other unique perks that your organisation offers.

By following these strategies, prospective new employers can adeptly navigate the complexities of counteroffers from current employers, ensuring that they are in the best possible position to secure top talent.

Find the best talent for your business with Airswift

Is your company in need of talent? Every business is in pursuit of highly skilled employees who possess the ideal combination of abilities. Finding the right personnel is crucial for any business looking to succeed and grow. At Airswift, we understand this need and are here to help you connect with the top professionals in the industry.

With over 60 offices worldwide, a network of more than 9,000 contractors, and a dedicated team of 1,000+ employees, we have the resources and technology to help you find the right people for your team. Whether you need visionary leaders or specialised experts, we're here to help.

Seize the opportunity to work with exceptional talent. Choose Airswift as your partner in this pivotal journey.


This post was written by: Tomás Battaglia, Content Marketing Coordinator