Counter offers are among the most frustrating turn of events that can happen during the recruitment process. You’ve put in the hours of hard graft, having built a strong relationship with a candidate and introduced them to your client who, after months of searching, has identified your candidate as “The One.” They place a strong offer on the table and you can’t wait to get on the phone to tell your star candidate the exciting news.
They sound positive on the phone but they need a few days to consider the offer – nothing out of the ordinary. You’ve had a few high fives in the office and you’re already mentally spending the bonus money that you know your placement will bring in this month.
And then, it happens!
Their current employer swoops in with the counter offer and you can sense the placement, and your monthly target, slipping away. And we all know that, more often than not, counter offers DO NOT work out in the long term. To help you manage the situation effectively and convince your candidate to make the right decision for them, here’s 7 counter offer statistics you can use when you’re having that crucial conversation.
1. 80% of candidates who accept a counter offer from their current employer end up leaving within 6 months.
Perhaps the most popular statistic recruiters are drawn towards is this one. It confirms the suspicion that by the time a candidate is motivated enough to go through the application and interview process for another role, even if they accept a counter offer, they will not be staying at the company in the long term. This may be for a number of reasons; whether they accept the counter offer and then quickly decide it is the wrong choice or they lose respect from their superiors and are inclined to move on a few months later.
2. 9 out of 10 candidates who accept a counter offer leave their current employer within the twelve-month mark.
Just to put the nail in the coffin, this statistic shows just how fragile the candidate’s future at their existing company is, if they accept. A counter offer is beneficial to the current employer because it also buys them sufficient time to look for a long term replacement, with the knowledge that the candidate is almost certain to leave within 12 months.
3. 50% of candidates that resign will be counter offered by their current employer.
In the past, counter offers were reserved only for senior members of staff but, in the last 10 years, the tendency for the existing company to counter offer has increased, even for more junior roles. As we can see from stat 4, although a counter offer may make the candidate feel valued, in truth, it is often more financially beneficial for the employer to make a counter offer than to immediately accept defeat.
4. It can cost the current employer as much as 213% of annual salary to replace a senior executive.
Financially speaking, counteroffers make complete sense to employers, particularly for senior roles. If the employer is tasked with replacing an employee who earns £85,000, this means it could potentially cost up to £181,000 when you factor in the recruitment process, time lost on work and training costs.
When you consider this, counter offering with a salary rise of £20,000 doesn’t seem like such an extravagant risk for an employer. In fact, employers can temporarily satisfy the requirements of a key employee in the knowledge that they can prepare themselves for their departure.
5. 50% of candidates that accept counter offers from their current employer are active again within 60 days.
This statistic re-emphasises just how short term the solution of accepting a counter offer can be for candidates. There are often a multitude of reasons why candidates are looking for a new role and, for the majority of cases, the novelty of an increased salary and the promise of more responsibility wears off very quickly; usually within 2 months.
6. Only 38% of hiring managers reported not making counter offers at all.
Admittedly, this statistic is from 2014 but it is unlikely to have dropped dramatically. The reality is that hiring managers will make counter offers if they feel that it is financially viable or they honestly feel that they can offer the candidate a more worthwhile career proposition. So if you haven’t come across them as a recruiter yet, it really is only a matter of time. The wise thing to do is to have your facts and figures prepared to help manage a counter offer situation when, not if, it happens.
7. 57% of employees accept counter offers made to them.
The demoralising fact is that the majority of counter offers are still accepted but this shouldn’t demotivate you. As a recruiter, you must act as an adviser to your candidate, giving them the broader context and the clarity to judge for themselves, but ultimately leaving the decision up to them. After all, it is their future and their career and whether they accept the counteroffer or not, you want to maintain a solid relationship with your strongest candidates so that when they are ready to make the next step up, they think of coming to you first.
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