As the economy and demand for great employees continue to be red hot, we employers are confronted wi...Read More
2022: The Year of the Counteroffer
By: Amanda Rassi, Director of Human Resources Search
We watched 2021 be defined by a new era of opportunity for employees seeking better pay and the option to work at home. These factors drove many of the career transitions people made during that time and continue to drive turnover today. According to CNBC, “Americans are quitting their jobs in record numbers, and economists say the Great Resignation is likely to keep up well into 2022.”
If January is an indication of what hiring in 2022 has in store, an added challenge that is sure to arise will be combating the counteroffer. With more job openings than available candidates, employers understand that it’s difficult to recruit for new talent in today’s candidate-driven market. It is easier for them to maintain their current workforce by offering a quick-fix income increase and more remote options.
Now I am constantly seeing top talent receive multiple job offers at one time, and their current employer is getting in on the action by counteroffering to retain them. In this job environment, companies fear losing quality employees because it’s not a given that position will be able to be filled. Last week, a candidate I was working with for a Head of HR role received a 57% increase in total compensation to ensure they would stay at their current company and not make the move. Which begs the question: Are Counteroffers a Good Long-Term Strategy for Either Party?
An employee should recognize that their loyalty, growth, and opportunities for advancement are likely jeopardized with the admission that they are willing to leave their current position. It’s also hard to know if the counteroffer was just an advance on an upcoming raise, or what the future holds now that they’ve shown their cards.
Employers need to make sure they are not using the counteroffer method often, creating unbalanced pay equity within their organization while not solving underlying issues. According to Progressive Recruitment, “9 out of 10 candidates who accept a counteroffer will leave their employer within 12 months.” By blindly giving out counteroffers a company may be simply delaying the inevitable turnover.
There are certainly pros and cons to counteroffers, and ultimately whether they are successful is based on a few variables that money can’t always remedy. Figuring out what motivators retain the best talent is complex and varies on individual personalities and career goals. It helps to ask some deep questions that really get to core of a counteroffer’s long-term viability.
5 Questions to Determine If a Counteroffer is a Successful Solution:
- Does the employee believe they are in a positive and happy work environment?
- Do they really feel like the company and its leadership care about them and their future?
- Are they fulfilled and doing something they love?
- Do they think there’s opportunity for advancement and growth at the company?
- Is the employee’s compensation aligned with their contribution and skill level?
Answering these questions can help you decide if a counteroffer is the right solution – whether you’re offering it or considering one. These determinants can also help you decide if the counteroffer is a long-term solution, or just a possible short-term fix to a bigger problem.
In a market where employees and employers are looking out for their best interest, anything is possible because of the sheer number of opportunities that are out there for top talent. While this market is unpredictable, one thing you can bet on is the war for talent will be won by a company’s commitment to compete and dedication to the well-being of their employees.
About the Author:
Amanda Rassi joined StevenDouglas in 2013 and has played an integral role in developing the Human Resources Search Division. Amanda has first-hand experience as an HR Professional as she began her career as an HR Generalist working for a Top 100 Experiential Agency. She specialized in HR operations including high-volume national recruitment. She further pursued a recruiting specialty and prior to joining StevenDouglas, Amanda built and managed the Talent Acquisition department for a national outsourcing organization that contracted with Fortune 500 clients.
Do you have a Counter Offer question? Contact Amanda Rassi, Director of Human Resources Search at StevenDouglas at 954.475.6660 or ARassi@stevendouglas.com