Picture this: you’ve finished the recruitment process for a new position in your organisation. You’ve written the job description, conducted the interviews, held feedback rounds with the other interviewers and you’ve made an offer to the top candidate. Brilliant! Your work is over.
But then you hear that the candidate has had a counter offer from their current employer. Nightmare!
It’s common for candidates to receive a counter offer from their current company when they hand in their resignation. But generally, they’re a sticking plaster for all the other factors and reasons why your candidate began their job hunt in the first place. In fact, 50-80% of employees that accept a counter offer leave their company within 6 months due to recurring issues.
So how can you successfully carry out counteroffer management and lower the chances of it happening to your candidates? The key is to ask the right interview questions and offer the best incentives to your top candidates.
Let’s dive into how you can reduce your risk of getting stung by a counter offer.
Table of Contents
What is a Counter Offer?
A counter offer is when a candidate’s current employer offers them a seemingly-better package when they hand in their resignation. This can be incredibly frustrating for you as a hiring manager as you’ve gone to all the hard work of interviewing them and deliberating over whether they were the top candidate for the role.
Job offer negotiation, or a counter offer from a current employer, usually takes one of 3 forms:
- Higher salary: Salary negotiation is probably the most common form of counter offer as it’s generally the easiest and quickest option to put in place.
- Promotion: All of a sudden, that dream job with more responsibility that the candidate wanted becomes available as soon as they hand their notice in.
- Benefits: The company may offer additional benefits like flexible working hours, more annual leave or health insurance to try to get the candidate to stay.
Why Do Employers Make Counter Offers?
There are plenty of reasons why employers would make a counter offer to a top candidate. Again, counteroffer management usually fits into 3 categories:
- Recruitment and training costs: It can cost up to £12,000 to hire a new candidate on the average UK salary, so it’s no wonder employers want to hold onto their current team members. Plus, if the organisation uses recruitment consultants, it could cost even more.
- Reduction in productivity: Recruitment can take a long time, and if there’s no one available to immediately take on the leaver’s role, the business could see a reduction in output or even a loss of income.
- Pride: Businesses, especially SMEs, might not be happy that their top candidate has found a better position somewhere else. They’ll want to negotiate a better deal to get their employee to stay – especially if that means stopping them from moving to a competitor.
How to Prevent Counter Offers
Ideally, you want to stop counter offers from happening altogether, but that’s pretty tough when you have no influence over the candidate’s current employer. So instead, you want to prevent a potential candidate from accepting a counter offer from their current workplace if you decide to offer them the position. There are some things you can do to try to avoid ending up in a bidding war with the other party:
Ask the right interview questions
Don’t be afraid to tackle counter offers head-on in interviews. Ask candidates why they want to leave their current employer and what they would do if their boss asks them to stay.
If a candidate tells you that their main reason for leaving is for more money, you know that a better salary offer from their current organisation might be enough to get them to stay. Consider whether you are able to offer the candidate their desired salary if you think they’re the best fit for your company.
Keep in contact
If you make an initial offer to a candidate, don’t leave it there. Make sure you stay in contact with your prospective employee to keep up the excitement and momentum.
Keep in touch and (tactfully!) ask how their boss took their resignation. It’ll give you insight into how likely it is that they might be faced with a counter offer.
Show your company’s value
If your potential new employee was attracted by the great work-life balance you offer, the prospect of a new challenge through career development programmes or incremental pay rises, make sure you continue to promote the benefits staff get by working for you.
When you send the candidate an official offer letter, consider adding all the benefits that they will get by working with you, and attach links or resources where appropriate.
Give them the opportunity to meet again
While your candidate is considering your offer, invite them into your workplace again to meet their prospective team, stakeholders and any direct reports.
It’s a great way to give your potential staff member the opportunity to get a feel for the people they’ll be working with and helps them see how they will fit within your work environment. Make sure you are open with them and encourage them to ask questions about how your organisation works and any other elements of your business that they might have concerns about.
Offer a great benefits package
These days, offering a good range of employee benefits is one of the key things candidates will look for when they’re searching for a new job.
Make sure that the incentives and benefits you offer are competitive, and make sure the package is driven by feedback from your current team members to ensure you’re offering benefits that people actually want.
Some of the top benefits that candidates want to see include:
- Flexible working
- Sabbatical leave
- Bonuses
- Free meals.
There are plenty more incentives to offer candidates to try to prevent them from accepting a counter offer. Let’s look at them in more detail below.
Offering Incentives to Top Candidates
If you’re convinced that you’ve found the best person for the job but you’re worried they may accept a counter offer, or that yours might not even be their only offer, try offering incentives to top candidates. There are plenty of benefits you can provide to try to make your business the place for their next career move:
1. Flexible working
Flexible working is one of the most sought-after benefits in the UK. In fact, a 2022 study by Remote found that 77% of British workers want flexible working hours, so if you don’t offer it, that new job offer might not seem as enticing to a candidate.
Working from home or hybrid policies are becoming the norm, so see what you can do to offer this to your top candidates. The 2021 Gartner Digital Worker Experience Survey found that 43% of respondents said that working from home and flexible hours helped them achieve more productivity, so offering this perk to your candidates could improve your business output too.
2. Employee assistance programmes
If you’ve not got an employee assistance programme (EAP), get working on one now. EAPs offer support to staff members that might be struggling with their physical or mental health and wellbeing, whether it’s personal or work-related. They give your team access to free confidential advice, services and perks that are designed to improve their wellbeing and therefore their job performance and experience at work.
Some of the most common support offered within an EAP includes:
- Counselling
- Health insurance
- Financial support
- Discounted gym membership.
Having a good EAP shows candidates that you care about your staff’s wellbeing both in and out of the work environment. It could help a candidate decide to take your job offer over staying in their current position.
3. Generous annual leave
As much as EAPs can show you care about your staff’s wellbeing, offering them a generous annual leave package demonstrates that you understand the importance of switching off from work regularly.
In the UK, almost all UK workers are entitled to 28 days of paid time off per year, but this can include bank holidays.
If you want to make your job offer stand out, consider offering more annual leave. It’s common for businesses to offer 33 days annual leave including bank holidays, but some are offering as much as 38 days or even unlimited holiday – but there’s some evidence to show that this does more harm than good.
Consider what your business can afford and see what you can do to make your annual leave policy more attractive.
4. Clear career progression plans
Make sure that you make a commitment to your team’s continued learning and development through career progression plans.
The top candidates for any role will want to grow their careers, and will look for positions that show potential for promotion and additional responsibilities as well as training to help them move through the business. They’ll want more than a job title – they’ll want the promise that they’ll be given the opportunity to learn new skills and develop themselves.
It might be useful to have an example personal development plan to hand so you can show the potential employee what progression can look like in your organisation.
5. Market-rate salary
While training and development is important to top candidates, they still have financial needs – and will therefore expect their target salary.
Make sure you do your research on the market rate for the role you’re hiring for, and if you find an amazing candidate, pay them what they deserve. Otherwise, their current job may come back with a counter offer of a pay rise, and it could be enough to turn their head.
Salary negotiation is tricky, but ensuring that you show how much you value a candidate by offering them the right amount of money will help them to make a final decision about your offer of employment much more quickly.
6. Sign-on bonuses
In this candidate-driven market, many companies are offering sign-on bonuses to help attract new team members. Lots of businesses offer a cash bonus after the employee has completed their probation period.
However, you could negotiate with your top candidate about what they’d like the bonus to be. They may want a paid training course on a topic that’s of interest to them, or extra annual leave – the bonus doesn’t necessarily have to have direct monetary value.
So, there’s much more to job offer negotiation than just offering more money. The two parties, both the employer and the potential employee, need to consider all the options available to them. For the employer, that might be researching similar positions in other companies and seeing how they can increase their benefits package in a financially sustainable way.
For the candidate, it might be weighing up the pros and cons of moving to a new employer. While they might be able to get an increased salary at their current organisation, they might find the problems that caused them to start looking for a new position in the first place will return after a few months and they won’t get the career progression they wanted if they stay.
Overall, employers need to offer a great package that includes a market-leading salary, relevant career development opportunities and a good work-life balance to fend off counter offers. What can your business do to reduce the risk of it happening next time you’re hiring?
Recruitment and Onboarding with Factorial
Factorial offers a comprehensive all-in-one HR software solution that revolutionises talent acquisition and onboarding processes. Our platform empowers you to efficiently recruit and nurture employees in a personalised, fast, and user-friendly manner, eliminating the need for manual processes like spreadsheets, email chains, or sticky notes.
By unifying the hiring process for both managers and applicants, our software ensures seamless integration for new employees. This results in enhanced employee satisfaction, better role preparation, increased productivity, and overall company success. Such improved experiences contribute to stronger employer branding, making your company more appealing to top talent in the future.
With Factorial, the entire employee lifecycle is seamlessly managed within the platform, providing various features to enhance your HR processes:
- Build a captivating careers page to attract a larger pool of candidates and optimise your recruiting process.
- Elevate your employer branding effortlessly with custom-generated careers pages that attract more potential candidates.
- Tailor application forms to match your specific requirements.
- Guarantee timely responses to all candidates’ applications.
- Personalise job offers, application forms, and pipeline steps for a more engaging candidate experience.
- Centralise and automate your onboarding and offboarding procedures for maximum efficiency.
- Create personalised onboarding experiences for new employees, ensuring a smooth transition into their roles.
- Establish structured task flows to guide new employees during their onboarding journey.
- Facilitate the exchange of responsibilities between employees throughout the onboarding and offboarding processes.
- Centralise all employee documents and personal information for easy access and data management.
With Factorial’s all-in-one HR software, you can transform your talent acquisition and onboarding processes, leading to a more successful and attractive workplace for top talents.
