When Taking a Counteroffer Can Beat Going Elsewhere
With demand for senior managers on the rise as the job market and
economy heat up, a flurry of counteroffers are expected to rain on executives
who give notice this year.
"Counteroffers always go up in a climate like we're now
seeing, and my clients are now talking about candidates they're trying to
recruit getting more counteroffers," says David Lord, president of
Executive Search Information Services, which advises companies on executive recruiting.
ExecuNet, a networking group in
Accepting a counteroffer is generally frowned upon in recruiting
circles. Search executives warn that executives who accept counteroffers
usually lose their companies' trust and end up leaving within a year.
"Nine out of 10 times, counteroffers end up being the departure
platform," says Mark Lonergan, managing partner with Lonergan Richards, a
Still, recruiters and corporate HR executives say there are
circumstances when accepting a counteroffer can work out professionally. If you
can change what made you want to hop jobs in the first place, staying with your
company can be a better option than leaving, they say. "It is often easier
to stay than go," says recruiter John Wood with Spencer Stuart in
Jeffrey Hofstetter had been with market researcher A.C. Nielsen in
"I stayed because they offered me one of the premier
positions in the company, and I wanted the international experience," says
Mr. Hofstetter, now 40.
Mr. Hofstetter left Nielsen in late 2000, about two and a half
years after accepting the counteroffer, because of a management change. He's
now executive vice president and general manager for Clover Technologies Group,
an imaging-products manufacturer in
He says he's glad he took Nielsen's counteroffer because he was
able to direct a $100 million business and see the world. The 20,000 options
Siebel had offered came to be worth in the millions as the share price rose,
though it has since declined. Still, Mr. Hofstetter has no regrets. "I
traveled to dozens of countries and helped launch software to some of Nielsen's
biggest clients world-wide," he says. Siebel had no comment. A.C Nielsen
didn't respond to requests for comment.
Recruiters suggest candidates weighing counteroffers focus on the
nature of the work their employer is offering. "If you are open with your
boss, discuss what's concerning you," says Fred Crandall, Midwest director
of strategic rewards in
If you can't fix the problems, additional money from a current
employer usually won't be enough to improve things. "People seldom go
through the upheaval of moving just for more money," says Mr. Wood.
"People at this level are thinking of a whole host of things."
When you talk to your boss, you may find the company ready to make
the adjustments you want. "In some cases, the employer hasn't told the
person they have bigger plans for them," says Mr. Wood. "They will
sometimes move quickly to give the person more responsibility." To find
out if you might be in line for a promotion, say something like, "I'm not
privy to how succession planning is being handled, so can you shed light on
it?" If you can't resolve fundamental issues, it may be time to go.
Mike Rowe, executive vice president of human resources for
Activision, an interactive entertainment products company in
Mr. Rowe believes counteroffers are "entirely
appropriate" when an executive decides to go elsewhere because he or she
didn't know what the company was planning for them.
"Obviously, you wouldn't want to throw money at them, but if
someone takes a VP job elsewhere because they didn't know the company was
planning to make them a VP down the road, it's time to say, 'Shame on us, we
haven't told you what we have planned for you, and you may want to rethink the
circumstances,'" he says.
Ham Davis was working as a bond salesman in
Naturally, it's better to talk with your employer before you have
accepted another offer. Mr. Davis says he didn't like turning down his outside
offer after accepting it but "the opportunity to do what I wanted to do
was worth more than the money," he says. Mr. Davis, now a director for a
Midwest bank, adds, "I had no intention of thinking I was gaining leverage
and every intention of making the move."
If you fear that your company, in countering, is biding time until
it can replace you, ask for a contract specifying generous severance if things
don't work out. Firing you in a few months would mean the company has
negotiated in bad faith, which is seldom the case if an organization wants to
retain you. Although it does happen, Mr. Wood says, "in my 12 years of
recruiting, I have never seen someone who received a counter get fired."
Finally, if the recruiter you've been working with tells you not
to accept a counter because your company will never trust you, keep the advice
in perspective: Recruited finalists who turn down job offers to stay where they
are can spoil months of a search firm's work and force them to start all over
again.
"That lack-of-trust thing isn't true," says Mr. Rowe.
"That's a recruiter who's trying to pull you out because they don't want
to lose their fee. If you have a long-tenured employee and an additional
legitimate need to fill, and the person has opened a dialogue with you, why
wouldn't you want to keep them?"
-- Ms. Capell is a senior correspondent for
CareerJournal.com. She can be reached at frances.capell@dowjones.com.
Article from CareerJournal Today –
March 2005