HOW TO HANDLE A COUNTER OFFER FROM YOUR CURRENT EMPLOYER

In my 35 years of recruiting, I can’t remember a happy ending to a case where an individual resigned and then accepted a counter offer to stay at his or her current employer. Why is that? Counter offers usually don’t address the underlying reasons why people want to leave their current positions.

Individuals change jobs for a variety of reasons. Their current role may lack intellectual stimulation, career development or progression opportunities. He or she may lack a cultural fit with the manager or organization. Or the executive may be tired of a long commute or an intense travel schedule and want a better work-life balance. Compensation is usually the last reason people leave their current positions or not even a factor at all.

Compensation is usually the last reason people leave their current positions or not even a factor at all.

Ironically, counter offers are almost always only about money. Companies may match or even go beyond the new offer to try to convince the person to stay. However, most other “promises” to address the driving force behind the decision to leave are simply “false promises,” and the reasons the employee had for searching for new employment in the first place do not go away.

If the reason was cultural fit, the company will rarely change its organizational structure or culture for one person. Even if management sincerely wanted to, effecting organizational change is a challenge that takes a great deal of time and effort. If the reason was lack of intellectual stimulation or professional development opportunities, the company would have promoted the person before he or she resigned and on its own terms.

According to one 2018 survey, 58 percent of managers make counteroffers to retain employees who receive job offers from other employers. How long do employees who accept a counter offer stay with the company? “Less than two years,” was the average response, according to the same survey. Counter offers are nothing more than a quick fix—a band-aid that gives a company time to assess the situation and determine the best action to take. Ultimately, the end result is often the same: the person is replaced or leaves.

Counter offers are nothing more than a quick fix—a band-aid that gives a company time to assess the situation and determine the best action to take.

If you are the recipient of a counter offer, be aware and follow your gut. If your instinct is to leave for another opportunity, stick to your decision and go. Be excited to look ahead. Of course, resign with grace and always keep the door open, as we’ve written about before. Sideline any objections with a clear and confident explanation that covers where, when and why you are leaving. Once you make the announcement, you are basically past tense in the eyes of the organization, but you will always be remembered for how you left. Keep all bridges intact. Times have changed over the years; and it is now acceptable to return to a former employer in a more senior role after having gained additional experience elsewhere.

If you are the employer contemplating extending a counter offer, be sure to think through the long-term implications. If you really desire to retain the individual for the long term, how will a restructured role or compensation package effect the organization? Will it positively or negatively impact your succession planning process? Will it upset internal parity? Can you sincerely address the fundamental reasons that caused the person to resign in the first place? If not, then congratulate the individual and keep the lines of communication open. This way, if an opportunity presents itself at some point in the future for the person to be invited to come back, he or she may do just that.

Article updated September 30, 2019

Questions, we get questions. “What should I do?” “Who should our company hire?” “How should our company structure this position?”

The most important question of the week is not any of the above. Not surprisingly the question is “How can I help my son or daughter who is a recent college graduate get a job?” One recent report indicates that only 22% of college graduates have secured jobs this year. Although this is not our focus, much of the expertise that we use to recruit outstanding executive management is applicable to your son/daughter’s search. The following are a few brief recommendations.

1. The Mind Set. Finding a job is a full time job, especially in these tough times. Merely sending out three or four resumes a day will not suffice. You must act as if you have a job and you have to report to work at 8 am. The job’s location can be at a library or home office. The important thing is that you are not distracted by personal phone calls, household activities or friends. This is why the outplacement firms do well-not because they find you a job-but because they instill a discipline of going to an office where you devote eight hours a day to getting a job.

2. Have a good resume. I am always amazed at how many resumes we get that have spelling errors-and this happens with even with senior executives. Ask friends and your parent’s friends who are in the workforce for feedback on your resume.

3. Ask yourself these important questions: What do you want to do? What companies offer positions that would allow you to do this? What size company do you want to work for? What industry? What geographical location? Remember that many positions are not advertised and are found by word of mouth.

4. Once you have answered these questions, start researching. Look at business periodicals. I find the Houston Business Journal’s Book of Lists is an amazing resource because it lists a number of different types of companies-those that are growing the fastest, pay the most, are the nicest places to work etc. Most other major cities have these books. They are a good investment. Fortune, Forbes, Business Week and local papers also have articles that talk about notable companies.

5. Once you have found companies you would want to work for, write or email them a concise letter along with your resume. In writing the letter, do not address it to “Dear Sir or Madam” or “to head of Human Resources”. Do your research and find out the name of the President of the company, the head of human resources or the department in which you would want to work. Always use a middle initial and his or her exact title. That shows that you are detailed and resourceful.

6. The most important part of any job search for a college graduate or anyone looking for a job for that matter: Network, network, network. Do not be afraid to ask for help. If you went to a certain college, get lists of alums that may be working at companies you are interested in. If you are a member of a certain fraternity or sorority, see if you can find alums at those companies. People are usually happy to do a favor for someone they have something in common with. Use sites like LinkedIn to add your own contacts. The more contacts you have, you are connected to the contacts of those contacts. Remember also to return the favor. It is the law of karma….what you give comes back to you again and again.

7. If you are a parent, do not micromanage the process. Be supportive without asking “how many resumes did you send out today?”

In summary, getting a job is a numbers game. Do you have to make ten calls, or ten thousand calls? Assuming it is 10,000 calls, the faster and more disciplined you are, the faster you will get a job.

June 12, 2009
Follow Up to “The Most Asked Question of the Week”
Wrapping up last week’s blog by answering a few of the many questions we got to help the children of our clients who are graduating from college and who do not have jobs Thanks so much for your response to our first blog.

Hi, thank you very much for the suggestions you posted last week. They were suggestions that I was able to pass along to my daughter. How can my daughter find a headhunter to help her?

Posted by: Paula Finlay June 11, 2009

First, it is helpful to understand how headhunters are paid. They typically earn a percentage of the first year’s salary (usually 20-30%) of the candidate they place. There are not many headhunters that will find a new college graduate a job because the fee would be so low. As one of our bloggers mentioned in an earlier post, graduating engineers can sometimes find a headhunter to help them. But aside from that, I’m not a big fan of using headhunters to find you a job. I think it builds character when someone can go out and determine who they want to work for and try to get an introduction. Secondly, many corporations simply cannot afford to pay fees these days and given the huge number of people competing for the same jobs, they don’t have to. Thirdly, if you don’t know the headhunter well, you really don’t know how he or she is regarded by some companies. Better to represent yourself.

How much should I be willing to help my college graduate in his job search?

Posted by: Matt Conroy, June 11, 2009

Parents can help by looking at a resume and offering suggestions, if asked. In this economy, if the parent has contacts that will open doors, he or she should use them. Just don’t fall into the trap of being responsible for all of your child’s job leads. People who really do the work to find exciting companies that are hiring, get interviews and eventually jobs, will build a sense of self esteem that is important as one enters the business world. If your child does meet with your professional friends, make sure he or she writes thank you notes.

Loved reading your ideas last week but my son wants to know what else he can do.

Posted by: John Hurwitz, June 11, 2009

1. The government is spending a lot of money now. Search the internet to see if there are entry level jobs there.

2. Take some courses this summer at a local college to beef up your resume. For example, accounting is always good, in addition to marketing and computer science.

3. There are companies in remote parts of the country that are hiring, if you have any wanderlust, apply to them. One that comes to mind is Wal-Mart. Now Bentonville, Arkansas may not satisfy your need for wanderlust, but they are hiring. Some of the large credit card companies have operations in South Dakota.

4. Research the type of company you want to work for…forget saying “I just have to get a job”.

5. While you have the time, dare to dream about what would be the perfect company. Go to the library and research. Which are the best companies in Houston, Texas, and the US to work for? Do those companies resonate with you? If so, see if you have contacts there through alums, parents etc.

6. Volunteer a few hours a week. It will make you realize how lucky you are, allow you to meet new people, and provide a beneficial diversion to your job search challenges.

ALL ARTICLES

SOME INSIGHTS INTO THE TRANSFER OF POWER UPON RETIREMENT

We’ve had numerous opportunities over the years to conduct searches for executives who will be replacing a retiree, or soon-to-be retiree. The process of retiring can be awkward for both the retiree and the company. As is true with most things in life, there are no absolutes, and every organization must determine the best plan for everyone involved.

Not surprisingly, when exiting executives can’t wait to hit the door—whatever their reasons—it makes for a crisp transition. Conversely, when retiring executives don’t have a plan for their new life in retirement, or worse, they don’t want to retire, the change of control can be difficult for everyone, at both a professional and a very personal, emotional level.

Timing

No two clients handle the setting of an executive’s retirement timetable in the same way, and we hear strong opinions about timing formed through experience in the trenches.

Two weeks? Too fast. Executives tell us that there simply is not enough time to even learn what questions to ask, much less absorb the knowledge dump in that amount of time, even when those leaving remain available.

An extended transition, while seemingly well-intended, creates more problems than solutions.

Two quarters to two years? Too slow. Many times, an extended transition, while seemingly well-intended, creates more problems than solutions. For one, the retiring executives must continue to find ways to remain relevant to the organization and validate themselves and their (usually large) paychecks. Perhaps more critical is the impact such delays have on the troops who are uncertain about to whom to look for directives and leadership. Despite everyone’s best intentions, employees will most often pursue familiar routes of problem solving and communications until forced to do otherwise.

That said, a longer transition can help, especially when the outgoing executive is able to manage certain matters while the new executive deals with bigger issues, like getting up to speed on the organization, its business strategy, its people, and its potential needs.

Worst case? Undefined transition schedules that leave the organization in a state of limbo. A mandate for change can be made especially difficult when the creator of those policies and procedures is still around. If the trains are running on time, installing a new leader doesn’t imply wholesale change. Either way, the ambiguity creates a tightrope upon which the entire organization is perched, trying to balance potentially competing loyalties, questions about authority and chain of command, and employees’ uncertainty about their own future vis-à-vis the organization and their new manager.

Undefined transition schedules leave the organization in a state of limbo.

Just right. We have found some consensus indicating that a one- to two-month transition period is just right. This seems to allow for both the outgoing and incoming executives, and the people on their teams, to implement an effective, efficient, and respectful change of control that honors the contributions of those leaving while conferring credibility on the new leader.

Announcing the transition

How an organization handles the messaging of retiring executives and their replacements seems to play a significant role in how smoothly the transition occurs. One major corporate client begins planning at the highest levels six months before the selected retirement date, makes a formal announcement two months out, and then the retiree is gone. Some organizations prefer to ease the executive into retirement, being careful to not offend anyone or intimate anything less than a stellar performance by the retiree, and a longer overlap is often viewed as more appreciative of their contribution.

So much seems tied to the frequency with which an organization may deal with these situations. Generally speaking, larger organizations have standardized procedures and smaller organizations almost have to reinvent the wheel each time.

Consider the future

Interestingly, a couple of themes consistently surface as we speak to both outgoing and incoming executives: (1) treat people with respect, and (2) remember that this is just one piece of a continuing story.

They express it in various ways: what goes around comes around, karma, the Golden Rule. Call it what you will, the message is clear: We would be wise to remember that we will all be the retiree someday.

The company culture conversation isn’t anything new, but as employment rates stay low and the remote versus in-office debate volleys back and forth, it’s a discussion here to stay.

Intentionality is at the core of building company culture; sometimes, the strongest advocates for culture come from inside the building. Often, the best response leadership can give its employees is to listen and empower employees to suggest and implement plans. This approach isn’t just about the warm fuzzies; Gallup reports an eighty-five percent net profit increase over five years within companies that build a strong culture.

So, what does this look like in a real-time, tangible way? With offices and time zones spread across the country, The Alexander Group, like many other professional services firms, asked the same question, with leadership actively listening and welcoming ideas.

The results?

Well, for one, you will find most of us gathered or in front of our computers the third Thursday of every month for happy hour, a 60-minute opportunity to chat, laugh and discover new things about each other. The Alexander Group’s Anthony Ott spearheads the monthly event, drawing from experiences at a former employer.

“We have our heads down, working so hard that it’s nice to take a breath and get to know each other better,” associate Anthony Ott said. “We talk about non-work things and that helps build camaraderie, empowerment and trust.”

Ott uses an app that randomly selects the various groups each month, making sure at least one member of leadership is included, supplying the teams with ice breakers, trivia, quizzes and other conversation starters should they be needed. The Alexander Group is a gregarious bunch, so while the trivia has largely gone untouched, the spirit behind happy hour is thriving. The four to six people per group allows for conversation in a small setting, which is also by design.

“Having a small group is more conducive to really talking with each other. It allows us to see another side of a co-worker they may not normally see because we’re in a work mindset,” Ott said. “We all have a common denominator, and this gives a chance to expand culture and team building.”

Sociologist Tracy Brower studies work-life happiness and fulfillment and calls this “Social Capital,” the ability to form fulfilling relationships, generate new ideas and ask advice for how to get things done within the organization.

“Strong cultures also have intricate webbing of social capital—the networks of people across the organization. To maintain positive cultures in hybrid/remote working situations, leaders need to be intentional about encouraging people to build their networks,” Brower said. “They can do this by connecting people across departments, providing for cross-functional learning opportunities and creating time for people to have virtual coffee or networking discussions with colleagues across the company.”

The happy hours are in addition to monthly catered lunches where staff is encouraged to catch up over a meal, group outings to play darts or Top Golf and annual company retreats. Many of The Alexander Group team members, including managing director John Lamar, are based in California, so the West Coast contingent makes it a priority to gather in person a few times a year.

“It’s so much fun to meet in person, give them a hug and spend that time together,” Ott said.

A by-product of leadership-supported gatherings is the framework of a safe space to exchange ideas and encourage mentorship. Employees who know they are seen and heard feel valued, and that means greater staff retention.

McKinsey & Company study authors Terra Allas and Brooke Weddle say connection building helps meet the psychological and emotional needs of employees. They suggest setting up regular/daily meetings at the beginning of each day, allowing time for socializing and creating regular events to build social connections. McKinsey research shows society is a key source of meaning for employees, along with company, customer, team, and individual.

Indeed, that is what Pax8 CEO John Street finds with his employees. Street prioritizes inclusivity within his company, connecting every day with someone on his staff in a meaningful way.

“Creating a feeling of belonging locally, regionally and globally is priceless, and sustaining that feeling requires an inclusive approach and active commitment from leaders. For example, I make it a practice to call one employee each day and ask, “What’s going on in your world? What are you thinking about?” These discussions help me signal to every employee that they belong and are valued,” Street said in a January 2023 Forbes Magazine article. “Embedding inclusion and belonging is a core tenet of employee recruitment and retention.”

Indeed, Ott, knowing he was heard and supported by leadership, was motivated to expand the social capital plans at The Alexander Group. Next steps include one-on-one exchanges where team members can dedicate time for business development, marketing and organizational ideas and a quarterly exchange of constructive firm-wide suggestions.
“Empowered employees feel like they have a voice. We all come from different places and have different ideas. We all have something to offer,” Ott said.

Street has also found an energized employee base by listening to his staff. They feel encouraged and see themselves rising within Street’s IT company.

“When employees know their voices are being heard, they not only feel engaged but are actually engaged. Innovations rise to the top, and the individuals who bring great ideas to the table often become future leaders in the organization. Because they deeply understand the importance of being heard, these new leaders will then continue to prioritize listening to team members. Leaders can encourage employees to speak up in a variety of ways, like physical or virtual suggestion boxes, surveys or simply asking them directly,” Street said.

Every company is different, so if happy hour and axe throwing aren’t exactly the social experiences your team would appreciate, human resources expert Renee Cocchi says what’s most important is choosing activities that will help teams get closer to each other, be happier and more comfortable in the workplace so they can produce their best work. Planning to get social? Cocchi offers these tips when adding events to the culture-building event calendar:

Clearly communicate the goals and purpose of the activity
Encourage participation and collaboration from all team members
Make the activity fun and enjoyable, but also challenging.
Follow up on the activity to discuss any lessons learned and how they can be applied in the workplace.