How to minimize the risk of counteroffers

November 4, 2019 at 1:01 PM


 

Highly competitive labour markets beget all manner of adaptations. Consider for example the dramatic rise in counteroffers.  Just recently we had a candidate go through a long, competitive search process with one of our clients, come out on top, negotiate hard, accept the position, sign the employment agreement, and then essentially never show up. Instead, the candidate accepted an altered yet sweetened proposition from his current employer, sent out a few mea culpas, and left our client out in the cold.

Though we did not see it coming during the search process, the tell-tale signs of a counteroffer scenario were visible almost immediately after the employment agreement was signed. Highly responsive throughout the search process, the cadence and predictability of the candidate’s communications with us suddenly changed. He became hard to reach then elusive committing to a start date citing his inability to officially resign to his CEO who ‘travels extensively’. Though he assured us that his decision to join our client remained steadfast he subsequently indicated that he had been asked to meet the chairman of the board for dinner to explain his decision to leave the firm.  For a candidate who had articulated a laundry list of management, cultural and strategic gripes about his current employer, his actions were unexpected and concerning.  He soon after admitted his employer had launched a ‘full court press’ to convince him to stay, and for the first-time acknowledged doubts about his decision. And then it was all over. Subsequent events at the candidate’s company did explain the mysterious last-minute pivot, and why he agreed to remain, but in the end a lot of effort was expended, time was consumed and all that remained were missed opportunities and frayed emotions. For us, it was the first time in years that we had been blindsided like this and while we did not enjoy how it felt, it forced us to reflect on lessons learned.

While instances of counteroffers cannot be avoided altogether, as a rule, we have always believed that good search/hiring processes help mitigate their likelihood. They do so by ensuring that both the employers and candidates conduct themselves in a manner that enhances the likelihood of good decisions and reduces the vulnerability to counteroffers.  For employers this means that as much as possible, they run hiring processes that are transparent, thorough and balanced. In addition to vetting candidates for appropriate experience, skills, and cultural attributes, they probe to understand motivations, unmet needs, and aspirational career arcs. In essence, smart companies concern themselves with both sides of the equation, and with two-way fit, which conveniently, happens to also build trust. Companies ensure that as much as possible candidates are provided the information they need to make informed decisions.  This is not always easy and not always in the companies best, short term interests.  Nonetheless the all too common lament from new executives of, ‘I had no idea what I was getting into’ should be viewed as the nightmare scenario to be avoided at all costs. 

For executive search firms, trust is also critical. Candidates need to believe that the search firm’s concerns are not solely those of their corporate clients.  Search firms earn trust by providing objective counsel, perspective and information that adds value to the candidate’s journey. They also advocate to ensure that there is transparency in their clients’ selection process and that the candidate has the requisite information to accurately gauge the company, role and fit. Once earned however trust is hopefully reciprocated. If the search firm advocates for transparency and candor for the candidate, they have every reason to hope for the same from the candidate.  This means being forthright with the search firm, letting them know if the candidate’s situation materially changes during the search process, if concerns arise, new variables are introduced, discussions launched with other firms etc etc etc. In other words, the search firm asks that there be no surprises. Of course, asking and getting are two separate issues.

Finally, companies and search firms need to remember that a signed employment agreement is not the end but rather just another step in a long process. Discussions pertaining to the offer stage should be followed by discussions around resignation strategies and scenario planning. In turn, those need to be followed by discussions on best practices and strategies for transition and integration into new roles and companies and how progress will be measured along the way. Staying close to the candidate throughout is key. A successful, happy new executive and employer is the goal.

The frequency of unwelcomed surprise endings brought on by counteroffers, may or may not continue to be a hot topic.  Either way, hiring companies and their search firms are more than mere spectators or victims to those outcomes. They are active participants and how they conduct themselves and their processes play a material role in how the stories end. They should conduct themselves accordingly.


About the Author

Robert Hebert is the founder and Managing Partner of StoneWood Group Inc., a leading executive search firm in Canada. Since 1981, he has helped firms across a wide range of sectors address their senior recruiting, assessment and leadership development requirements. 

Contact Robert by email at rhebert@stonewoodgroup.com or call (1) 416-365-9494 Ext. 777