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Newtons cradle - each ball representing a counter offer

The ethics of counter offers

​Whilst the Australian culture mostly lends itself to open, transparent discussion, it remains a fact that the majority of people feel extremely uncomfortable talking about money. However, avoiding the conversation inevitably leads to some less-than-ideal behaviours during recruitment processes.

We spoke with industry veteran, Associate Director Ming Cheung about his perspective on this once-in-a-career market and the pitfalls to avoid for both candidates and hiring managers on either side of the counter-offer conversation.

What new behaviours are you seeing in the current market?

With the job market experiencing unprecedented levels of demand, we are seeing a huge increase in candidates' variety of opportunities.

Candidates have never had so many opportunities thrown at them, ever.

Normally, a candidate might be looking at 2 or 3 roles, but as the market is so buoyant there is an unparalleled level of confidence. In short, there are lots of jobs and people know they can get a great job with a great pay increase.

However, that confidence is translating into bad behaviours from candidates who ordinarily wouldn’t behave that way.

We are seeing unusually high numbers of candidates who are not fully committed to moving or just fishing for a better deal where they are.

Is this a new trend?

This isn’t unique, but it is elevated in the first half of 2022.

Why would someone try to get a counteroffer?

Often the counteroffer is seen as an easy way to successfully leverage a discussion about a salary increase. It can also be the path of least resistance – you’ve found a new role that comes with some trepidation about change and a counteroffer is made and it’s an easy thing to accept. However, unless money was the only reason for looking, this is generally a bad strategy for getting a pay increase.

Accepting a counteroffer is more understandable if you have been approached by a head-hunter. However, if you have consciously decided “I’m not happy so I’m going to move,” got online and done your research, gone through a process, and then said yes to an offer and then decide to stay as you’ve been counter offered, that is unprofessional and viewed poorly in the market.

How does this impact the employer and what can they do?

In critical role areas like tech, the counteroffer is going to happen.

It’s an easy choice – you either must find an extra 25-30% to keep someone known to you in their role or go to market and risk either not finding someone suitable or not finding someone at the same rate of reward as the outgoing team member. Add to that, potentially a recruitment fee and the risk of that person not being able to get up to speed quickly and it’s a simple recipe for a counteroffer.

However, it’s enormously frustrating, expensive and time consuming.

Our advice to clients is to have conversations about reward and work conditions on a regular basis to identify opportunities to ensure your team is engaged, and not spend time in recruitment processes to leverage these conversations.

What are the consequences for employees who find themselves in counteroffer scenarios?

It’s a highly time consuming and frustrating process to put your line manager through. Without exception, the recommendation in a high demand market is to have the conversation about money upfront not with an alternative contract in hand.

Personal brand and integrity damage internally – 60% of people who accept a counteroffer leave within 6 months, either voluntarily or involuntarily.

Typically, the employee will be next in line for right sizing. Once borders open or a new economic cycle begins, or both, you may be a sitting duck.

It’s a relatively small market with a long memory - recruiters and line managers you’ve engaged with just to get leverage will remember how you manage these things.

All the reasons you stated for wanting to move are still the same.

And lastly, what advice do you have to help avoid the counteroffer scenario altogether?

If you are genuinely thinking about your career, do your analysis on why you are unhappy in your current role and then engage with the market.

Ask yourself why you would take a counteroffer.

If it’s only money, have the discussion before you go to the market.

If there is no compromise, then be specific in your criteria to move and stick to it. There is an amazing market out there with fabulous opportunities for those who are committed to moves.

Ming is currently working on a number of roles within the digital space. If you are interested to find out more, contact Ming today for a confidential chat.

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