It is no longer uncommon for new employees to walk away from an offer that they have already signed and accepted. Or even worse, they are no-shows on the starting date.
Today’s corporate environment has made the counter-offer an important weapon in the war for talent. In fact, the counteroffer has become part of many companies’ strategy to keep salary costs down until they absolutely have to pay their best talent.
The kind of telephone call we hate
It’s the kind of call that all recruiters and hiring managers hate to get. It usually goes like this:
“Sorry, but I don’t think I can join your company. I know I already signed the employment contract. I promised I would never change my mind. But you see, my boss has given me a new big important project.
She told me, I’m the only one in the company who she can trust to lift this sort of responsibility. They are all so nice to me. And she also gave me a new title.”
Me (after the candidate hung up): Aaaaarrrrggghhhh !*$#@#$*!!!
So true, there is nothing as frustrating as getting that call from a candidate, who recently signed your offer letter and employment contract, that s/he will stay with their current employer because of a counter-offer (read: improved compensation and benefits).
Counter-offers rear its ugly head as employers fight for talent
It has been two years of hiring freeze, staff layoffs, and many people hesitating to change jobs.
Last year, we learned about the Great Resignation. Reports from my NPAworldwide colleagues around the world I hear that the supply of candidates is not meeting the demand from hiring companies.
With the recovery after COVID now on the way and a massive candidate shortage waiting around the corner, then what?
With this scenario, you will see counter-offers rear its ugly head as employers fight for talent.
Pre-boarding is different from On-boarding
Pre-boarding is what you do during the interview process. On-boarding starts when you have a signed employment agreement.
During pre-boarding, you should ask questions like why the candidate came to see you, what was the motivation for the candidate to come and meet you? It will give you valuable insight in the motivation.
Ask these questions:
- When we called you the first time about this job opportunity, what was it that got you interested in coming here today?
- What interests you about this position?
How will the candidate handle a counter-offer?
The best way to prevent that your candidate is pushed hard by the boss to accept a counteroffer of a higher salary or title is to ensure that the candidate’s boss does not make one.
It’s a difficult conversation but one you must have with the candidate the very first time you conduct the interview – and then continuously throughout the hiring process.
Check how the candidate will handle a counteroffer from their current employer and it will give you an important hint as you try to assess the risk of losing a successful candidate at the last minute.
Is the candidate serious about pursuing this opportunity? How will the candidate resign and handle a counteroffer? If the candidate insists, they will not accept a counteroffer, ask them to give you the reason why – in their own words.
- We also have to talk about what happens if you are offered the job; and accept it. It means you will have to resign. How will you do that and what will you tell your boss? What if they give you a counteroffer? Do you have any projects running that will delay your exit? Can you leave your boss and colleagues? What about the location?
- If we go all the way, meaning you get the job, we will be asked to do reference checking on your background. Should we expect to have any issues talking to previous bosses or colleagues you think?
- What other jobs are you currently considering or being interviewed for? How active are you right now in the job market?
Claim for damages if candidate fails to come
For whatever it’s worth, a clause in the employment contract that claims damages for failure to report for work, may at least give someone second thoughts before jumping ship. Here is a short version of such clause:
Your failure to report for work will cause the Company economic damages and losses, which are impossible to ascertain with certainty as a basis for recovery of actual damages. Therefore, in lieu of actual damages for your failure to report for work, you agree that damages may be assessed and recovered by the Company in the fixed amount of one month of salary.
You are only half-way when employment contract signed
The on-boarding starts the day when you and the candidate sign the employment contract.
Don’t even think that you are home and dry. Believe me, you are only half-way.
You need to fill the time from the signing of the contract to the first day of employment; in fact, even weeks into the new job.
Here’s a list of on-boarding activities:
- Offer a show-up bonus. But include in the employment contract that the show-up bonus must be repaid if the candidate leaves within 12 months.
- Have frequent telephone calls with the person.
- Invite for lunch or dinner with the new colleagues.
- Ask the candidate to call you immediately after giving notice.
- Set up their new email and let them access.
- Print the new business cards and send them to the home address.
- Include the person in your WhatsApp or Line group.
Be creative and you will have deserved the champagne when your candidate turns up on day one. Good luck.