Job Offers and Counter Offers –What To Do?

Friday, September 14, 2012

Most of us have dealt with employment offers and counter offers either as the applicant or as the hiring manager. As an applicant we know what we bring to the table and believe those skills are in high demand by others and will prove valuable to our prospective employer. As the employer, we believe we know the market’s going rate for the skills we need and have priced the offer in terms of internal and external equity and in keeping with our total compensation and organizational philosophies. However, your top candidate has come back with a counter offer and is asking for more money, a bigger bonus, additional time off, a richer relocation package, … etc. What are your options?

The oblivious first option is to let your initial offer stand pat. You have done your homework. You know the market value of the job, its skills, and how it all fits into your current organization. You have evaluated the candidate’s education, past job history, skills, feedback from peer interviewers, and you believe that you can see their potential. Of course you run the risk of losing your top candidate and having to look at your second choice or begin the recruiting process anew.

The next option is to make an offer somewhere between your initial offer and the candidate’s counter offer. If this sounds a little like bargaining or negotiating, it is just that. Many mangers feel very uncomfortable in these situations. You may now need to reevaluate your internal and external analysis. Of immediate concern should be internal equity. While there may be some wiggle room here, too great a differential could lead to cascading issues with peers or compression with supervisors. Any decision should be well thought through with the best interest of the organization in mind.

Lastly, you could accept the candidate’s counter offer. After all, this is your top choice and you need to fill a position that has been vacant for 3 or more months. The lack of staff has been affecting the performance of your department, or maybe the entire organization. It has been a long and drawn out search to find the handful of candidates who meet your requirements. Even in today’s job market, candidates with these skills will be placed quickly. In these tight economic and competitive times, managers are under significant pressure to produce results, in the office, in the field, on the shop or sales floor.

Assuming that you have priced the offer fairly and correctly, counter offers say something about the candidate. Do they really want to be part of your team or are they looking for just another stepping stone. Most of us want to advance in our chosen fields to the next level. However, there is an unspoken quid pro quo with most professionals in which most organizations realize that well qualified individuals will move up and on after some reasonable amount of time. In return, the organization gets the benefit of the employee’s skills and talent and the individual gets the benefit of acquiring or expanding new skills. As you evaluate your candidate’s counter offer, is your team and is your organization receiving as much as they are giving?