The Counter Offer: Employers Lose Time and Talent

  • Posted by: J. Kent Gervasini |
  • 6/10/12 |
  • 1:32 PM
The Counter Offer: Employers Lose Time and Talent

Colorado’s current unemployment rate, 8.7% in July 2011, is certainly not a reflection of the real hiring that is going on in the private sector, which leads the way in new jobs creation, according to the last Job Situation Report. New job creation is our economy’s future, unemployment rates, a report on our economy’s past. In the last few months we have seen increases, not only in our temporary staffing business, but also in our Direct Hire Search & Recruiting engagements. The Counter Offer is our future challenge.

At J. Kent, we are seeing well run, highly respected Denver employers making FTE job offers to add to their teams. Unfortunately, due to the Counter Offer, employers discovered that the talent found, after much time, effort and money expended, was lost. Afterwards they recognized that the sought after talent was hard to find since they had been searching for months, was needed now, and could have made an immediate day-to-day intellectual difference to their organization. Painful!

Why was the talent lost after job offer acceptance? A Counter Offer, or in some cases, several counter offers were made, finally accepted, and the new position offered was ultimately rescinded by the employed Candidate. As we continue to see the economy improve, employers are becoming engaged in new talent acquisition, however, don’t rule out the current employer, right or wrong, they will go to great extremes in order to hold on to talent that the new employer has just validated. Holding on to top talent, and attracting new talent in today’s competitive economy is critical.

As reported, many public traded company’s balance sheet are flush with cash, earnings are up and so are profits. However, in many cases salaries remain frozen; raises, if any, are low. Every employer is asking, when is the right time to hire? Others believe that since the unemployment figures are still high, compensation can remain low. In reality, Denver employers are competing for talent, even in a down economy.

There is a lot of strategy involved in making a solid job offer. Keep in mind that current salaries paid to Candidates that you are interviewing may not necessarily reflect current market demands or pricing. We understand that outcomes of 21% or 25% salary increases due to Counter Offers do not necessarily equate to real candidate value. However, many times Counter Offer negotiations produce such results.

  Case Study #1 Case Study #2
Industry Construction Commercial Real Estate
Functional Specialty Risk Management Property Management
Position Title HSE Administrator Assistant Property Manager
Salary Range $40 – 45K $40 – 50K
1st Salary Offered by Hiring Employer $44K – Declined by Candidate

$45K  -  Accepted by Candidate

2nd Salary Offered by Hiring Employer $47K – Accepted by Candidate No counter offer
Countered by Current Employer $52 K $45K - current employer offered promotion and matched new offer
Candidate Earnings Before Counter Offer Negotiations $43K $36K
% Increase in Salary to Candidate 21% increase 25% increase
Employer Time Lost due to Rescinded Job Offer 34 days

35 days

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