When Taking a Counteroffer Can Beat Going Elsewhere
With demand for senior managers on the rise as the job market and economy heat up, a flurry of counteroffers are expected to rain on executives who give notice this year.
"Counteroffers always go up in a climate like we're now seeing, and my clients are now talking about candidates they're trying to recruit getting more counteroffers," says David Lord, president of Executive Search Information Services, which advises companies on executive recruiting.
ExecuNet, a networking group in
Accepting a counteroffer is generally frowned upon in recruiting
circles. Search executives warn that executives who accept counteroffers
usually lose their companies' trust and end up leaving within a year.
"Nine out of 10 times, counteroffers end up being the departure
platform," says Mark Lonergan, managing partner with Lonergan Richards, a
Still, recruiters and corporate HR executives say there are
circumstances when accepting a counteroffer can work out professionally. If you
can change what made you want to hop jobs in the first place, staying with your
company can be a better option than leaving, they say. "It is often easier
to stay than go," says recruiter John Wood with Spencer Stuart in
Jeffrey Hofstetter had been with market researcher A.C. Nielsen in
"I stayed because they offered me one of the premier positions in the company, and I wanted the international experience," says Mr. Hofstetter, now 40.
Mr. Hofstetter left Nielsen in late 2000, about two and a half
years after accepting the counteroffer, because of a management change. He's
now executive vice president and general manager for Clover Technologies Group,
an imaging-products manufacturer in
He says he's glad he took Nielsen's counteroffer because he was able to direct a $100 million business and see the world. The 20,000 options Siebel had offered came to be worth in the millions as the share price rose, though it has since declined. Still, Mr. Hofstetter has no regrets. "I traveled to dozens of countries and helped launch software to some of Nielsen's biggest clients world-wide," he says. Siebel had no comment. A.C Nielsen didn't respond to requests for comment.
Recruiters suggest candidates weighing counteroffers focus on the
nature of the work their employer is offering. "If you are open with your
boss, discuss what's concerning you," says Fred Crandall, Midwest director
of strategic rewards in
If you can't fix the problems, additional money from a current employer usually won't be enough to improve things. "People seldom go through the upheaval of moving just for more money," says Mr. Wood. "People at this level are thinking of a whole host of things."
When you talk to your boss, you may find the company ready to make the adjustments you want. "In some cases, the employer hasn't told the person they have bigger plans for them," says Mr. Wood. "They will sometimes move quickly to give the person more responsibility." To find out if you might be in line for a promotion, say something like, "I'm not privy to how succession planning is being handled, so can you shed light on it?" If you can't resolve fundamental issues, it may be time to go.
Mike Rowe, executive vice president of human resources for
Activision, an interactive entertainment products company in
Mr. Rowe believes counteroffers are "entirely appropriate" when an executive decides to go elsewhere because he or she didn't know what the company was planning for them.
"Obviously, you wouldn't want to throw money at them, but if someone takes a VP job elsewhere because they didn't know the company was planning to make them a VP down the road, it's time to say, 'Shame on us, we haven't told you what we have planned for you, and you may want to rethink the circumstances,'" he says.
Ham Davis was working as a bond salesman in
Naturally, it's better to talk with your employer before you have accepted another offer. Mr. Davis says he didn't like turning down his outside offer after accepting it but "the opportunity to do what I wanted to do was worth more than the money," he says. Mr. Davis, now a director for a Midwest bank, adds, "I had no intention of thinking I was gaining leverage and every intention of making the move."
If you fear that your company, in countering, is biding time until it can replace you, ask for a contract specifying generous severance if things don't work out. Firing you in a few months would mean the company has negotiated in bad faith, which is seldom the case if an organization wants to retain you. Although it does happen, Mr. Wood says, "in my 12 years of recruiting, I have never seen someone who received a counter get fired."
Finally, if the recruiter you've been working with tells you not to accept a counter because your company will never trust you, keep the advice in perspective: Recruited finalists who turn down job offers to stay where they are can spoil months of a search firm's work and force them to start all over again.
"That lack-of-trust thing isn't true," says Mr. Rowe. "That's a recruiter who's trying to pull you out because they don't want to lose their fee. If you have a long-tenured employee and an additional legitimate need to fill, and the person has opened a dialogue with you, why wouldn't you want to keep them?"
-- Ms. Capell is a senior correspondent for CareerJournal.com. She can be reached at firstname.lastname@example.org.
Article from CareerJournal Today – March 2005