The Ultimate Guide to Counter Offers
The challenge of counter offers isn't new, especially when it comes to the food manufacturing industry. However, the last few year have been marked by a massive shift in the availability of skilled labor in the marketplace.
The ultimate guide to counter-offers covers all the fundamental facts about counter-offers, what is happening in the market today, and the undeniable data that making or accepting a counter-offer rarely works for any party in the long term.
What Is A Counter-offer
It's important to define what we mean by "counter offers" before we start discussing them.
A candidate decides to leave an organisation (we will cover the reasons why a little later on), and the individual in question will usually either:
work with a food manufacturing recruiter to secure a new role
or apply to the company themselves.
The candidate is made an offer and then proceeds to resign. Their current company then asks them to reconsider leaving; as a general rule offering additional benefits, including a salary increase.
After accepting the new job, the candidate has to decide whether they want to stay at their current company or leave for the better one.
Counter offers have been happening throughout the entire workforce since the beginning of time, and Brexit has made them even more common.
These are just a few examples of why the recruiting and staffing markets are so volatile.
According to the Office for National Statistics in the United Kingdom (ONS), on average, around 9 percent of workers change jobs every year. However, this varies widely by industry. For example, in 2016, the highest rate was recorded in construction at 13.4 percent, followed by manufacturing at 11.8 percent, wholesale trade at 10.6 percent, and accommodation and food services at 10.5 percent.
People didn't change companies in 2020, so logically, pressure is building in the system as candidates now consider moving.
As a recent workplace report from Microsoft reveals, these figures are mirrored in most parts of the western world.
The study found that employees were most productive when they worked at least 50% face-to-face, but that there was no clear correlation between time spent online and overall performance.
According to research by LinkedIn, nearly half (46%) of the world’s workforce are planning to leave their current job within the next 12 months.
With the economic recovery continuing and companies looking for new staff, it is expected that there will be a large number of job vacancies.
What will this mean for the job market? Here’s what we see as experienced food manufacturing recruiters.
The Hiring Triad and Counter-offers
A counter offer is a complicated thing, and depending on the role, a valuable and talented person might be offered a counter-offer to remain.
There are three parts of a triad with or without a recruitment expert like us in this scenario.
We have a client looking for someone to fill a position or build a team.
The candidate who wants a job where they can grow professionally
The candidate's current company wants him/her to stay.
Each has his/her own reasons for hiring, moving or counter-offering; let’s explore them in more detail.
Why Companies Make Counter-offers
It makes sense that a company would not want to lose an employee. However, if they're going to be losing one, why wouldn't they give them a counter proposal? If they were thinking of leaving, then they might as well get something out of it.
Last year was challenging for most companies, and some lost significant amounts of sales and had trouble growing. Now they're looking to get back on track by hiring an A-team.
With remote workers, staff being under increased stress, a temporary halt on development and training has resulted in many employees not being as sharp as they were before.
Regardless of whether you're new to the workplace or just returned from a long absence, everyone knows that this can affect your mood and therefore your productivity.
After that, of course, the economic recovery has started with many manufacturing firms having a good year winning new contracts and new business opportunities that they need to deliver.
If Amanda or Andrew resigns from their jobs, managers' first reactions are to wonder why they resigned and whether there was anything they could do to keep them.
As there was nobody else to take over for them, they'd logically react by having an empty order books and a few people who were just starting out performing again.
It would be wise to make a financial counter-offer in the minds of managers when they're considering hiring someone.
The problem is that accepting a job without negotiating for a raise or promotion could lead to leaving the company within a year. Our research shows that employees who accepted jobs without negotiation left their companies within 12 months.
Even though financial incentives are often used to motivate people to move, they're not usually the main reasons why people don't move. We'll look at this in more detail later on.
A Candidate’s Career Journey and Counter Offers
Now, let's discuss the person in the middle; the candidate. Why does the candidate want to move in the first place?
At a recent recruiting industry event, a company called Bullhorn presented some interesting statistics about why employees leave their jobs.
It's not ideal geographically, but traveling is challenging.
Lack of development and training
No career progression
Their line manager
The company culture
Millennials are the largest group of workers today, so they're likely to be the ones who leave most jobs.
As for the future, though the situation may change over time, the ability to work from anywhere, be flexible on when you work, and consider an individual work-life balanced will make an influence.
What about the whole money conversation? Counteroffering revolves around money.
Let's start by talking about money.
Money isn't usually the primary motivator for moving jobs unless someone is being hired at a significant discount compared to their current salary.
When recruiting for our client, the first thing we ask is their reason for wanting to leave their current role. Essentially, why do they want the job?
We don't just look at whether someone has talked to their boss before applying for a job. The truth is, if the person has been talking to their boss, then both parties benefit from the interview.
Raising someone's pay can help solve most problems, but it's not always about money.
What's not working for you right now?
People are usually open when we ask them why they want to leave their current job.
They have met a significant other who lives in a different part of the country;
They have an unlikable boss;
They've changed their goals since Covid.
There is no development or training available;
On top of not having any opportunities for career advancement.
They're always overlooked for the good jobs.
The company doesn't have any diversity policies in place.
Every person has different reasons for leaving their current job, and no one reason will be enough to justify a change. However, if there are several good reasons why someone would want to leave their current employer, then they may be worth considering.
That being so, retaining employees is squarely within the domain of management, and most employees leave their jobs because of things they can control.
If you're thinking about moving, then you should read these seven points. They'll help you decide whether it's worth making the big change.
The Downside of The Golden Handcuff
It's easier for managers to allocate funds to raise salaries than to recruit new employees.
It's easy for them to act now, but in the long term, they're not doing you any favours. Think carefully before acting.
Creating development plans and new projects takes longer than creating promotions, so the latest promotion promises appear.
It may take time to create a company culture where everyone feels comfortable and included. However, once established, it's hard to undo.
Here is another thing a candidate who accepts a job counter offers has to deal with. If you've shown that you're not really committed to the company, then your desire to leave could actually hurt you. And even though you haven't been assigned any new tasks, you might be left out of important meetings.
The challenge is that you're now overpaid for the job you're doing. You've moved into a new house and have a larger mortgage, which means less cash flow, at least for the foreseeable future, but the company has not changed its ways - you may be making more than before, but you're still unhappy.
Both sides feel uneasy, but finally we'll look at the company that thinks it has made an excellent job offering to an ideal candidate.
How Hiring Managers Can Prepare For Counter-offers
It's never fun when you're trying to hire someone and they say "no." But there are things you can do before you even ask them if they want to join your team.
Hiring an agency that knows the industry inside out is a game changer for any business.
Before we get started,
Once you've gone through identifying and interviewing the ideal manufacturing candidate and extending your offer, it can be demoralising to hear they've received a counter-offer from their existing employer. However, if you address this possibility early, you can potentially avoid a battle.
If you ask your potential employee whether they think their current company will offer them an attractive counter-offer, you may be able to learn something about what would tempt them to leave.
If your candidate says they'd prefer to be paid more than their current salary, but they don't think their current job offers enough perks, you can point out the benefits of your own company's perks and offer to set up a meeting between your candidate and some of the team members who might be able to help them learn more about your company's unique corporate environment.
If you know you offer a similar salary and benefits to your candidate's current job, but they want more, don't just throw more cash at them. Try thinking about why they were interested in leaving their current position in the first place. Maybe there was something else going on.
Focus on Your Strengths
When interviewing candidates for a position, you may want to inquire into their reasons for wanting to join your company. You could say something like "Can you tell us why you're interested in working here?"
You can offer your employees more opportunities for mentoring and training so they can develop new skills.
Knowing what triggered your candidate's decision to seek out a new job can help you convince them to accept your offer.
Work With A Specialist Food Manufacturing Recruiter
There are plenty of reasons why working with a specialist recruiter can make your life easier when you're looking for new talent. Recruiters help you find likely employees to be drawn to your specific role and company. This means that you have an increased chance of attracting employees with the same values as you.
Recruiters know your company inside out, so they can tell you which benefits to highlight when advertising your job opening. They can also advise you on effective ways to sell your job opening to potential applicants.
Recruiters can also provide advice on whether to accept a counter proposal from an employer or not. They can tell you when to stop negotiating and when to continue offering more money. This extra assistance can avoid companies from making emotional decisions instead of logical ones.
This particular strategy is something here at Food Recruit we recommend to all our clients.
If this happens, you can schedule additional meetings to discuss what else you could do to convince them to become part of your team. You can show off all the benefits of working for your company during these meetings by introducing potential employees to current staff members, taking them on a guided tour, and more.
If you want to hire someone, invite them to come and visit your company. Have them meet some of your current staff members and talk to them about their jobs. Let them know what kind of responsibilities they would be taking on if they were hired by your company.
If you can't physically see your candidate when they consider your offer, be sure to stay in contact by sending emails, making telephone calls, and holding video conference meetings. Let them understand that you're available to answer any questions that might help them decide whether to accept your offer.
Step back from the situation
It's important not to get caught up in a battle for one employee. If your potential hire decides they aren't ready to leave their current job, you or your recruiter might not be able to persuade them otherwise.
If you're having a conversation about the possibility for a counter-offer during an initial job interview, then you know which of your candidates aren’t 100 percent sure about leaving.
If you know that one of your top choices for a new hire is still employed by his/her current company, your recruitment partner will have other suitable employees to choose from.
If you would like to find out how our expert recruitment services can help find you the talent you need to expand your team, get in touch with us today. We have been recruiting in the food manufacturing sector for 7 years, and we can offer help and support to enable you to improve productivity. Get in touch with me by calling 07835426149 or emailing email@example.com and let’s start improving productivity in your organisation today.