4 Ways To Counter a Counter Offer

Counter offers should be expected, as nobody wants to lose their best people.  It is a lot easier to make a counter offer than to try to find a new person. Especially one that is top talent.

In some strange way a counter offer is a good thing. It signals that the candidate’s current company values them and they don’t want them to go. The hidden assumption in this is that the person is top talent. That is a good thing. The bad news is, now what? How should the new company handle the counter offer? Should they offer more money? Match the counter offer? Walk away and start the hiring process all over again? Negotiate with the candidate? There are lots of options, none of which are all that great.

Here are 4 ideas on how to avoid the counter offer.

1) The best way to handle a counter is by avoiding the candidate receiving a counter offer. It has been my experience that few companies ever discuss the potential counter offer with the candidate. It just never comes up. This is a mistake. The hiring manager should begin discussing the potential of a counter offer as soon as there is genuine interest in the candidate. This may be at the end of the first interview.

I have never yet heard a hiring manager say to a candidate, “We want to proceed with you and would like to bring you back to meet more people. I want to respect their time and yours. If we proceed, I’m curious as to how you will deal with a counter offer should your current company make one?”

This is important because now you are starting to tie the person down. Few candidates even think about the counter offer. By asking this question you are beginning the process of getting the candidate to commit to you. They are starting to put their word on the line.

After every interview you should continue to tie the candidate down by adding more ropes. Continue to bring up the potential of a counter offer. Before the offer is made, the hiring manager should once again ask the question, “We are going to proceed to the offer, however, before I do that I would like to understand more about how you will deal with a counter offer should it happen?” Follow up with, “ We only hire top talent. I view you as that and I know if you were on my staff, I would be concerned if you left. What will you say to the CEO when called into their office to discuss what it will take to keep you? What will your comments be?”

Once the offer is made you can add one more tie. “I want to make sure you don’t burn any bridges when you leave your company. What are you going to say to your boss when you give notice?”  What you are looking for is if the candidate left the the door open to a counter or are they telling their boss thanks for the time together, but my mind is made up; I’ve given my word and I’m completely committed to this new opportunity.

This may sound like overkill but it sure beats having to deal with all the issues if a counter offer happens.

2) Never get into a compensation war. You won’t win. If the candidate accepts more money now, they will never be satisfied. They are opportunistic and will leave you at the first opportunity they get  for more money or they will hold you hostage by constantly asking for more money.

We always recommend making your best offer and leave it at that. Let the candidate know you are making your best and only offer. Remove the chance of getting into a wage war. We have rarely seen them work out successfully.

3) Too often companies make an offer and that is the last contact with the candidate until they walk in the door two or three weeks later. This a a major mistake. Did you pick up on the word “major?”

For the next three weeks whatever energy, excitement, enthusiasm, and bonding that built up during the interviewing process begins to wane. The current company has all this time to express their love for the candidate, how much they appreciated their work, how much they will miss this person, and on and on.

You have to be in the game.  After the candidate gives notice you should contact them. Ask how it went and probe how they feel now that they gave notice? How did their boss respond to the news? The biggest thing to know, have they made the announcement to their team and the company? If they haven’t, or their boss asked them to wait until next week before announcing it to the staff, get ready, a counter is imminent.

The notice period is your opportunity to begin the candidate’s mind transition to your company. Meet with them, give them some work to start, invite them to staff or company meetings, include them in emails, and begin the process of putting them in their new job.

4) Understand exactly why the person wants to leave their current role.The real reason is rarely the first reason they give. Don’t accept the first canned answer. Probe to understand what is motivating this person to seek a new position. This is key if a counter offer happens.

Rarely will they tell you money. Usually it deals with some other reason, they are not happy in their current role, they lack career growth, the position isn’t challenging, their boss isn’t allowing them to take on new projects, or they have reached their limitations in the current company. Does your position address these issues? If it does, this is ammunition to use if a counter offer happens. You can now remind the candidate why they told you they are leaving. Since it wasn’t about money, how will a counter offer address their issue?

Since you asked the candidate in the interview why they want to leave their current employer and they gave you a bunch of stuff about career growth, and said that money wasn't the reason for leaving and then they accepted a counter offer based on money, chances are they lied to you.

Now you can respond, “We made you what we think is a good offer and our best offer. You indicated you weren’t leaving due to money and now it appears that isn’t the case. Our culture is built around high integrity, trust and values. It would be a good thing for you to accept the counter offer, as you probably wouldn’t fit in our culture.”

Even if you do everything perfectly, the candidate may fall prey to the counter offer. You are dealing with people and nothing is100%. All you can do is work to avoid the counter offer before it happens. Most of the time you will win, but not always.

You can explore our audio library, download free examples of compelling marketing statements, download a summary of our research project that identifies the biggest hiring mistakes, and get our culture assessment tool by clicking the links. All of these are free.

I welcome your thoughts and comments. Please forward this to your contacts on Facebook, LinkedIn, or anyone you think would benefit from this article.

Brad Remillard

Are You Over-Paid?

CEO overcome with joy at their compensation

You’re probably thinking – how could Barry make such an outrageous statement. Over-paid – Ugh! I’m actually under-paid.

But wait a minute – are you being paid for the outcomes you deliver or is it one of entitlement for the position you hold?

Why am I even asking this question?

In a presentation of our “You’re NOT the Person I Hired” program to a group of Vistage CEOs and Executives today, I challenged the group to be introspective about what they were being paid for in their companies.

In a common issue raised during our program, a number of CEOs and executives complained that they were not doing what was expected of them by their board, boss, investors, family members, shareholders, and other executives. Instead they were too busy to do their work since they were doing some of the work of their team.

Why do you accept this scenario? Don’t answer that just yet. We’ll return to that question in a moment.

In most cases, when a subordinate is really good at 70-75-80% of her job, but cannot do the other 30-25-20%, you will NOT fire her – you’ll just “dummy down” the job scope. Now you’re left with a problem to solve: Who is going to do the other 30-25-20% of the work that just got lopped off her expectations?

You can’t ignore the work – it’s still must be done – you can’t sweep it under the carpet or hope it goes away. In the vast majority of cases, it’s YOU as the boss who gets to pick up the slack. No one else has the time – you’ve already overloaded the entire team by cutting the department staffing right down to the bone.

One of the greatest frustrations that I hear as I talk to 40-50 groups of CEOs and executives every year in Vistage, TEC, management retreats, and association conferences – for the past 15 years – is that they are frustrated over their own jobs – these CEOs and executives cannot do what the organization needs them to do since they are buried at least 50% of the time doing the work their subordinates should be doing.

This doesn’t pop up and bite you on the backside all of sudden. It’s a gradual declining slope of your effectiveness as a leader and impactful contributor. Over time you’ve picked up 7% of Sally’s job, 9% of Mark’s job, and 12% of Paul’s job.

It’s the same concept that Michael Gerber talked about in his best-selling book, The E-Myth. Gerber suggested that many CEOs and executives fail because they allow themselves to work too deeply in their business or department (such as doing the work their team should be doing) and not focusing on what their contributions should be based on their capability, skills, and knowledge.

Of course, you can do it faster, quicker, and more accurately than your subordinates. You’ve been in their shoes as you came up the ladder. But is that really effective leadership when you let them off the hook of accountability/responsibility and do their job for them?

Before you know it, half of what you do every day, week, and month is the work you’re team should be doing, but they’re not strong enough to do it. So, instead of taking action and putting people into roles that can deliver the required expectations, you’ve allowed yourself to become OVER-PAID for the work you do on behalf of your subordinates.

Have you allowed this scenario to play out over last few years? How many of your direct reports have allowed this to happen to them? Imagine every executive, manager, and supervisor in your business is only 50% effective and significantly over-paid since they are doing the work their subordinates should be doing.

Starting right now – what’s your plan to correct this dysfunctional element of your culture where you dummy down employee jobs, take over their responsibilities, and keep them around – especially at their old salaries. Imagine getting 70-75-80% return for every dollar you invest in salaries.

I’d love a job where I could get paid 100% for a 75% effort and impact.

Did I make an effective case for why most CEOs and executives are over-paid?

Barry Deutsch

In search of benefits . . .

You have to wonder what the insurance companies were thinking. Many, maybe most, small businesses are struggling with cash flow issues; and we all know that. One might expect the insurance executives to be sending out the word to agents and brokers that in light of the “predatory government regulatory atmosphere,” there shall be no premium increases for small business clients. Apparently that hasn’t happened. Instead, monumental premium increases are hitting small businesses.

One small business owner I know, a staunch conservative and very pro business, was adamantly against ANY government intervention in health care. The only thing she felt was useful was to have government remove the interstate barriers to competition among insurance companies. Then the bill came to renew the insurance benefits for her employees. The increase was 32%. She is now all for some kind of intervention, not just more competition; maybe not too much public option, but something to help drive down costs. Many small businesses are finding that they cannot afford to be in the insurance benefit program.

On the other hand, you might think that in light of the administration's goals of putting in place more regulations and also initiating a “public option” for insurance, that they would try and keep any perceptions about government interference with health care out of the headlines. Again, the word hasn’t gotten to the committees making recommendations on women’s health. And so we get the news that one of the more effective programs for breast cancer screening is to be deemphasized. The public, helped by the media, interprets this new recommendation as proving that indeed big government wants to get between you and your doctor.

In similar fashion to the business woman above, another woman with whom I have had conversations around the health care issues was pretty much convinced that a public option was the only sensible way to contain health care costs. Otherwise, the insurance companies will continue to reap huge profits at the expense of policy holders. And, she claimed, the government isn’t really who we need to worry about. It’s the insurance companies who hang us out to dry with fine print and denial of coverage due to trumped up pre-existing condition claims. Needless to say, she’s having second thoughts now based on the mammogram flap.

So neither side on this argument seems to be paying attention to the public sentiment or the “customer's issues.” Arrogance is a word that comes to mind.

The major reason that companies are in the benefit business is to have something other than salary on which to compete for good employees. With the increasing cost of drugs, medical insurance and other mandated insurance such as worker’s compensation now going through the ceiling, it may be time to look for some other kind of benefits with which to attract employees. I know this is heresy, and I’m sure I’ll get a bunch of “hate mail,” but I’m thinking it’s time to hope that the government does take the health insurance monkey off the backs of our businesses and we can go find other benefits to supply our employees. It’s a chance to maybe level the field again – if costs are really reduced for employees.

The “big boys” will be able to afford the usual benefits for employees. If small businesses can’t, then they won’t be able to attract top notch employees; unless they can offer something else. One idea has surfaced in a new book called the Dream Manager. I’m sure we could come up with other ideas, including paying higher salaries so our employees can take care of their own insurance (if effective, low cost insurance becomes available). Wellness programs are much needed. The trick will be to greatly reduce the amounts spent on employee health insurance by business and use the savings to fund other innovative benefits.

How about you? What will you do about employee benefits? Are your health insurance premiums sky-rocketing? Will you have to cut back on benefits this year? Do you have other benefits, or plans for new benefits?

Each company offers its own benefits to employees, but there is one thing in common, as all the companies should work in accordance with Labour Laws. If you want to be covered under your state and federal compliance laws, click here to check out labor law poster.

Download a Cost Of Hire Calculator to help you know the true cost. CLICK HERE to get it.

About the author

Dave Kinnear is a sought after Business Advisor and Mentor. He works with highly successful executives through one-to-one mentoring and coaching meetings. Individuals who are presently running successful businesses and executives in transition work with Dave to ensure meeting corporate and/or career goals. Through his affiliation with Vistage International, Dave convenes and facilitates Advisory Boards comprising of Business Owners, Company Presidents and Chief Executives dedicated to becoming better leaders who make better decisions and achieve better results.

Pay Cuts For Work

In a recent survey we conducted 54% of the people responding would accept a position for less pay than their previous position. In fact, 46% would take up to a 20% reduction in salary.

As the economy continues to soften we will conduct another survey and compare the results.