Don’t Let a Counter Offer Cost You a Placement!

Today’s installment is courtesy of guest blogger Frank Michael D’Amore. Frank is the founder of Attorney Career Catalysts, a firm that places lawyers in law firms and corporations, and facilitates law firm mergers. He is a former General Counsel and law firm partner who is now in his 11^th year of recruiting. Frank writes a monthly column, “The Business of Law,” that is published in The Legal Intelligencer. You can find out more about Frank, including his soon-to-be-created blog, at www.attycareers.com.

You recruit a great candidate and beautifully manage the recruitment process, which leads to that person receiving a terrific offer. The commission check is almost in your grasp, when the candidate unexpectedly tells you that he has accepted a counter offer to stay with his current employer…..

This doomsday scenario, which may entail having to restart a search, or, worse yet, losing the opportunity if another recruiter makes the placement, can be avoided. The foundation should be laid early in the recruitment process, as you should receive a commitment from the candidate that he will accept an offer (assuming it’s a good one) if he fully goes through the process. You should not shy away from the possibility of a counter offer coming in to play, as it likely will if you’re working with a strong candidate. Rather, you should condition the candidate early on as to why accepting a counter offer is a bad idea.

The following ten points should be in your arsenal when addressing a counter offer. Some you may want to discuss at the outset of your work with a candidate; others may be best used when a counter offer is received:

1. Candidates who accept counter offers will ultimately leave their company anyway. Studies and anecdotal experiences of experienced recruiters have shown that approximately 80% of candidates who accept a counter offer will leave their company within a year; about 95% will do so within 18 months. This has been borne out in my own search practice, as I have ultimately placed all three candidates who accepted counter offers within a year of them rejecting an offer that was extended to them by a client.
2. If a counter offer is accepted, things will never be the same. Loyalty will forever be an issue, as senior management will not forget that the candidate who stayed had one foot out the door. The employment relationship is much like others in our lives — if you have ever had a significant other who almost left you for another, you’re likely to never forget it and this inevitably alters the relationship going forward.
3. If someone accepts a counter offer, decisiveness is automatically called into question. If someone goes through a long recruiting process, makes a rational decision to accept an offer and then reverses course, normally within a day or two, this hardly portends well — even within his company — as to the candidate’s ability to exercise reasoned judgment. Indecisiveness will be an attribute that will forever be associated with the candidate.
4. Promised changes are unlikely to stick. For some candidates, money is not the driver in making a move — the trigger may be dissatisfaction with some core ways in which the business is run. A counter offer that includes a commitment to change some of those practices may be well intentioned. However, history strongly suggests that once a few months go by, things tend to regress back to the norm and the promised changes end up being fleeting.
5. “Why did it take your potential move to make the company offer you more money, a new title, or to promise to make changes?” If the candidate merited extra compensation or some other recognition, it should have been taken care of before the candidate gave notice. Getting that bump or promotion, after the fact, calls into question how the company really feels about the candidate—is it genuine or a reflex reaction to keep others from leaving?
6. The benefits received when accepting a counter offer will be short-lived. When compensation season rolls around the following year, or when discussions ensue about promotions, or when leadership positions are filled or voted on, or plum assignments are given, the candidate who almost left is at a disadvantage. If it’s a close call on any of those issues between the company loyalist and the almost-departed, who is more likely to win that battle?
7. The microscope will be on a candidate who accepts a counter offer. A candidate who accepts the counter offer better perform well, as the practical impact is that he will be held to a higher standard in the future. When a company reaches to provide extras to someone — especially when that was not planned (as it wasn’t in such situations) — the expectation is that the employee will have to perform at a higher level to justify that benevolence—he has no margin for error going forward.
8. A candidate’s relationships with other employees may change. The changes that a company makes to keep someone can be disruptive to the overall business. When special deals are cut, it causes others — who have never threatened to depart — to wonder why they have not received the type of added benefits that someone who was about to leave did, which may trigger resentment from those company loyalists.
9. Where did the extra dollars in the counter offer come from? Compensation budgets are firmly established each year. When a company magically throws new money at someone who is about to leave, those dollars will have to be accounted for, and, in many cases, will come out of the candidate’s next bonus or raise, which diminishes the true impact of what is bestowed in the counter offer.
10. There are long-term, negative implications when counter offers are accepted. No matter how large the market is in which someone is based, the reality is that we live and work in a small world. The company that devoted considerable time, energy and resources in recruiting the candidate who accepted a counter offer, along with the recruiter, will never forget what happened. This very well may shut off some opportunities going forward and can have other harmful effects on a candidate’s future.

Don’t be afraid of a candidate receiving a counter offer. The earlier you confront the issue, the better, as you’ll diminish its eventual allure. Even if one is issued, you hopefully will be well armed to defeat it. Good luck!