Counteroffers, Secrecy, and Fear
Counteroffers are a fairly common occurrence in technology and other competitive job markets, and much of what we think we know about counteroffers seems to originate from agency recruiters. Google counteroffer and we find articles with fear-inducing titles.
Check the bylines for these articles and you’ll discover that many are written by recruiters. Some agencies are so bold as to direct their counteroffer article right at the candidates they represent. Or a page of Counteroffer Facts (EDIT: this article was removed but was archived here) which go on to list things like “Your loyalty will always be questioned” (which is probably not a fact). It’s pretty clear how recruiters feel about counteroffers.
There is nothing wrong with recruiters writing articles about counteroffers. You are reading one now. Many provide ‘statistics’, while others contain anecdotes revealing the unfortunate fate of those who accepted. Spoiler Alert – In recruiter articles, those who accept counteroffers always die alone and penniless. These pieces aren’t necessarily biased or untrue just based on the source, but when recruiters are the source you need to understand one thing.
Recruiters NEVER benefit from an accepted counteroffer.¹
Counteroffers are the bane of a recruiter’s existence. Put yourself in a recruiter’s shoes for a minute. Over a few weeks you’ve identified a strong candidate, screened, set up interviews, debriefed, negotiated a salary, checked references, and an offer was accepted. You will be rewarded handsomely, as a fee might be in the neighborhood of 30K (sometimes less, sometimes more). If the recruiter is independent or self-employed, that’s a car. And then you get a call saying “My company made me a counteroffer, so I’m staying.” You just ‘lost’ a car. I’ve had it happen, and it burns.
Even if a counteroffer makes all the candidate’s wishes come true, it’s still never in the recruiter’s best interest for it to be accepted. Recruiters get paid when they get you a job with their client – not when their efforts result in a better job at your company. This is part of the reason the recruiter/candidate relationship has flaws, as the interests of the two parties are not always aligned. It’s no wonder some recruiters invest significant time in talking about counteroffers.
How do recruiters prevent counteroffer acceptance?
The best way to prevent a counteroffer from being accepted is to prevent a counteroffer from even being presented, and recruiters may take a two-pronged approach to protect their fee and the interests of their client. Here is a peek into the methods. (NOTE: These details are provided to benefit job seekers, and not as any endorsement.)
1. Find out why a candidate is considering new jobs. “Why are we talking?” This question sounds innocuous and usually comes across as an ice breaker, yet the answers prove valuable if a counteroffer is presented.
2. Get the candidate’s opinion on counteroffer early. “Have you ever accepted a counteroffer?” may come up in your first conversation with a recruiter. Candidates rarely admit that they would consider a counteroffer. If the recruiter can get a candidate to say they wouldn’t accept a counteroffer in an email, candidates should expect to see that email when a counteroffer is presented.
3. Tell stories and provide ‘statistics’. Many recruiters cite a National Employment Association study that says 50-89% (depending on where you find the statistic) of people who accept counteroffers will not be with the company after six months. I was unable to find any reliable source for that (date, sample size). Of the 34,000 Google hits on “National Employment Association”, over half contain the word counter or counteroffer. Seems odd, no? It appears the organization somehow merged or morphed into a couple others (NAPC or NAPS), but the statistic lives on. I’ve seen anecdotes that this stat has been used since the 70’s.
Others mention a Business Week figure at 90%, but all I was able to find was an article from 2004 that cites “some studies” and puts the number over 50%.
One may get the impression that recruiting firms are using statistics from other recruiting firms, as these studies seem difficult to verify. Anyone got a source? To get decent statistics, you need consistent methods of gathering data. Even the definition of what qualifies as a counteroffer is up for debate, so any stats are questionable.
Even without numbers, anecdotes work just as well.
4. Fear, shame, worthlessness. The statistic is delivered as “Most who accept counteroffers are gone in six months, either by choice or (dramatic pause) … termination.” People have a strong fear of being fired. Candidates will be told how they will never be promoted or given raises, will be a social outcast, and they will not be given interesting work. These are all possibilities, but obviously not guarantees, and someone who habitually forgets to buy the donuts could suffer a similar fate.
The recruiter may also remind you that your employer never really valued you in the first place. They might say “Sure, you got a raise – but you had to hold a gun to their head to get it. How much do they really care about you?”
5. Resignation. If a recruiter has ever offered to provide you with a resignation template, or to even tender your resignation on your behalf (it’s rare but it happens), it may have been a genuine act of kindness to save you time. A recruiter’s resignation template may include language intended to prevent counteroffer, and some are direct. “Let’s not waste time discussing what it would take for me to stay, as I have already passed on my firm commitment to a new employer.” If the candidate emphasizes that he/she does not want a counteroffer, resigning with a letter that says so is appropriate.
6. Transitioning. Once a candidate accepts an offer, a recruiter wants the candidate’s loyalty and interest to shift to the new employer. A lunch may be scheduled before start date to discuss projects. If there are skills that will need to be learned, the candidate might choose to get a head start. Interactions between employers and new hires have obvious benefits beyond the prevention of a counteroffer acceptance, but that will be in the recruiter’s mind.
I remember discussions in one recruiting office about which day of the week was most common for counteroffers to be given, and then suggesting that the recruiter get together with the candidate on that day.
When It Happens
When a candidate accepts a counteroffer, it usually sets off recruiter panic mode. The recruiter will remind the candidate of some things – why they were looking in the first place, opinions expressed about counteroffer, the dangers, their firm commitment to the new company, etc. As a last resort the recruiter might make a personal plea and mention the fee, or even their own family. Some people will say a lot of things for 30K.
I don’t have a problem with some of the things recruiters say as warnings against accepting a counteroffer, as much of the script contains real possibilities. Accepters might not get promotions, raises, or interesting work. We can question the morality of using fear to get someone to do what you want them to do. If the recruiter is honest and believes that the new job is best for the candidate’s career, it’s easier to justify what is said. I do have a problem with the statistics, and the recruiting industry’s willingness to throw around questionable numbers.
Statistics about counteroffers are impossible to measure when you consider the interests and incentives of the parties involved. Companies that counteroffer departing employees are best served to keep that fact private, as employees may pursue offer letters just for the sake of a raise or improvement and outsiders may question if the company pays market rates.
Likewise, those who accept counteroffers may be concerned with the word getting out, as it may genuinely impact attitudes towards the employee. Employees who accept counteroffers are likely asked to keep quiet about what happened, and it’s usually in their best interest to do so.
Based on the secrecy incentives on both sides, one might assume that the prevalence of counteroffers is likely higher than reported, and success/failure rate of counteroffer is difficult to assess.
Regurgitating outdated or questionable statistics as fact hurts the credibility of the recruiting industry. Counteroffers are all very different and impossible to classify or evaluate without knowing countless other details about the candidate’s situation and the organizations involved. When listening to recruiters’ opinions (including this article), it’s vital to keep the source in mind and make important career decisions based on all the information available. Ask yourself if the counteroffer will solve the issues you had with the employer, and if so whether your means of achieving these results (resignation) will make it difficult to stay.
¹ There is one extremely rare instance where a recruiter might benefit from a counteroffer. Say the recruiter places a candidate at Company A, and during the recruiter’s guarantee period (usually 90 days) the candidate accepts an offer from Company B, and then gets a counteroffer Company A. In this case it benefits the recruiter for the placement to accept the counteroffer from Company A so the recruiter will not have to refund a fee.