It is a fact that many companies have lost up to one-third or half of all their chosen job candidates to counter-offers. For some candidates these counter-offers often turn into counter, counter, counter-offers.
Executive search companies, traditional recruiting firms and recruiting companies need to bear in mind that organisations have to work extremely hard today to keep good people as a result of the keenly competitive nature of business, particularly the IT sector.
The reality is that being annoyed or surprised about counter-offers is probably a short-sighted reaction. The truth is that there is simply a lot of competition for suitably qualified candidates, and this reality must be factored into any recruitment campaign.
This competitiveness is a global phenomenon in the high-tech industry with the South African scenario being further exacerbated by the brain drain, which has not diminished.
To understand why people change jobs, it is crucial to understand what it is that makes an employee want to quit. It is not always money - it could be unhappiness with colleagues, lack of advancement opportunities or any number of causes.
What serves as an incentive for good employees these days is the ability to make a difference; a passion for the work they are doing, the working environment; a clear developmental or career path prospect; or it may even be the existence of a superb mentor in a new role.
When reasons such as these are the fundamental reasons for a person wishing to leave an organisation, there is very little a company can do - even by the way of a counter-offer - to prevent the loss of an individual.
Money matters
In my experience, the retention of an employee through a counter-offer seldom works in the longer term if the reason for the initial resignation is more than merely "a monetary issue".
If a candidate I was placing is subjected to a counter-offer - and many good ones are - I always ensure they are counselled and the initial reason for them wanting to move is fully reviewed. As part of a professional recruitment process it is always crucial to address the issue of a potential counter-offer.
Increasingly, employment terms and conditions and counter-offers include further stock options - this "golden handcuff" mentality has both its good and bad points. If the stock price performs well, it will help to retain employees. The negative is that it might encourage employees to remain with the company even if it is not in their best individual interests to do so from a growth and development perspective. Also, from an employer perspective it becomes more difficult to dismiss an employee who has substantial wealth due to him or her as a result of "soon to mature" stock options.
If an employee decides to move for reasons other than just monetary gain, then the company losing the person must ensure that the reason for the move is something beyond their control, and is not something that could be reasonably addressed within the company structure.
The expense of having to replace someone is many more times more expensive than training someone. This is making some companies experts at retention.
Many times, because the employee knows the company and the culture, and because there is a history of loyalty between the employee and employer, further stock options, better compensation and promotion often add up to the employee staying.
A really excellent performer might have one, two or even three companies trying to hire their skills. Given the short supply of really good personnel, even an average performer can be a hot candidate these days. This situation can lead to a string of counter, counter, counter-offers. In many cases, a good performer seeking a raise may find that the quickest way to obtain it is to quit, or at least threaten to quit!
* Doug Leather is MD of Bryan Hattingh Executive Services.
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