June 23, 2021

The Truth About Counteroffers


Episode Highlights

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If you’ve been around this industry for a while, you’ve heard a lot of horror stories. “90% of people who accept counters offers leave in 6 months!” is what My first manager told me. 

But it’s nonsense. There has never been any meaningful data that I’ve found supporting that. I’ve talked to too many people who have taken counteroffers and everything worked out just fine. 

James Hornick and Matt Tokarz decided to peel back the layers (full video below). Turns out, getting reasonably accurate data on counteroffers isn’t that hard. James ran a poll on LinkedIn. Of the 1135 people who took a counteroffer, only 30% left within 6 months. 

But tenure doesn’t tell the real story. Maybe people who left in a few months were still happy they took it. Or maybe people who took a counter and stayed several years regretted it. James then ran another poll of people who took counters and if they thought it was a good decision. 

Of the 344 who had an opinion, 60% said staying was a mistake, 40% say it was a good decision.

What can we pull from this?

Recruiters need to acknowledge reality. Counteroffers are bad for recruiters and they waste everyone’s time. But they aren’t necessarily bad for job seekers. You don’t have to like it, but it undercuts your credibility (and frankly, the entire industry’s credibility) when you fudge the numbers.

A 60:40 split is a coin flip. Sure, maybe the trust is gone and the bridge is burned. But maybe they legitimately didn’t realize you were unhappy?

Everybody’s human. Employees can get frustrated and their managers may miss things. Be proactive and check in on your team. Encourage employees to voice frustrations and discuss their career goals. 

As for the people you’re recruiting: empathize. Is their current job better than the role you have? Have they talked to their current manager about the things they don’t like? They should be proactive too.

If the move doesn’t make sense, encourage them to stay put. Onto the next one…

Episode Transcript

All right Matt, thanks for joining me today. Wanted to talk about counter offers.  I guess the reason for the conversation- counteroffers are really popular this year.

Like you’ve seen tons of them, right? Yeah, like across the board I think more this year than any one year already and we’re not even into July yet.  The thing that always gets me about counter offers is I think we need to admit that counteroffers are bad for recruiters. Internal recruiters, agency recruiters, like every recruiter hates counter offers

because it doesn’t matter who you’re working for, you thought you had a position filled and then suddenly you didn’t. That being said, the reason why I don’t hate counter offers and the reason why I have an issue with how the industry treats counter offers is I just- I hate lying.  If there’s a reason that I should be against this counter offer, I want it to be a real reason

not just some made BS. And that’s what I wanted to counteract. I’ve been around the industry a long time. I think there’s two things that are prevalent. One, anybody who came up through an agency environment had it beaten through their head that you have to convince candidates that counter offers are always bad.

That was my experience. Was that your experience too when you got started? Yeah. Every recruiter was taught that and trained that, that you have to always talk candidates out of taking counteroffers. Okay. That’s one. The rationalization for that, like it’s based in truth but it’s the type of things that can’t be applied to every situation.

The second thing is there’s just so many phony stats thrown out about this that are completely made up and people actually believe them. What I always heard and what I think most recruiters hear, you threw out a different one when you’re talking about this beforehand, is I always heard that 90% of people who take counteroffers leave within six months, that’s a popular one.

What did you hear?  What was the number you heard? That it’s 75% are gone within the first year. Yeah, just crazy numbers.  And the thing is for a long time, I believed that for the first part of my career but then you start talking to people who took counteroffers and you realize that, oh they’re not all gone.

They’re still at their job. Maybe this isn’t actually based in anything. I ran two polls and these are open access polls we did on LinkedIn. Anybody could kind of vote on them just to see like, okay, what do the numbers really look like?

Have you taken a counter-offer to state your company after resigning? If so, how much longer did you stay? I gave three real answers and one BS. One meaning, three answers of people who said yes. Yes, I left within six months. Yes, I left within six to 24 months. Yes, I stayed two plus years. Then no, but show me the results. And I had to throw that in there because  if you don’t let people like exclude themselves from it, they’re just going to click something else, right. So people who didn’t accept one are going to pick a number randomly,

right. So actually got 6,332 people responded. 1,135. Yes, took a counteroffer. Sounds like  18% took the counter. The other 82% don’t count. It doesn’t matter what they said. They never took a counter offer. They’re not relevant to the conversation, how long they stayed. So getting the meat of it, of the people who said yes, who have actually taken a counter off in their career, 30% left within six months.

So 30%, not 90%. Kind of a big difference. 30.8 left within six to 24 months and then 39.2, basically 40% stayed two plus years. What are your thoughts on that? A little surprising. I figured they’d skew higher actually towards people left within the first two years. And being an open poll, it’s a little unique cause like every industry is a little bit different in how they, how it operates too, because I’m sure if you look at tech and sales, counter offers are probably more or less prevalent depending on the vertical and the industry.  I’m surprised it’s 60, 40. I figured it would definitely be closer to 70, 30 or 75, 25 like I always had heard. The real meat of this is of the people who actually took counter offers, were they glad they did it or  did they feel like they burned themselves afterwards? Because you could take a counter offer, make more money, leave within three months, you could go somewhere better and say you know what?

I’m so glad I took that counter offer. You know what I mean? Cause this is not about what the companies think.  It’s really about like, was it good for the person who actually took it? You could take a counteroffer, stay three years and realize this is a mistake I should have left.

You know what I mean? So what the tenure was isn’t even the success metric of whether it was a good or bad to take. So I ran another poll and this one was really simple. So if you’ve taken a counteroffer to stay your company after resigning was a good decision? So, yes, it worked out. No, it was a mistake, undecided because it’s too early and I never took a counter offer to give everybody who liked clicking on stuff, stuff to click on.

 1,182 people responded. Most of them were people who never took counter offers. So I got rid of people who never took one, people who were undecided because again, they don’t really matter to this one. We’re just trying to figure out of the people who took one and made up a decision, good or bad. 334 people and it was pretty much an even 40, 60 split. 40% of people said it was good decision and 60% said it was a bad decision. 10 years ago, I would have said 10% good, 90% bad, but going into this, I kind of thought it’d be 50, 50.

I think a part of it is as I get older, as I have a family, as I have a house, like the more reasons to accept a counter offer and like be comfortable and like, you know, other factors that play into like what goes into a counter offer, really creeps into my mind.

As I get older in my career and like progressing my career, they start to make more sense. But when I was like 23 and I was like, oh, that’s dumb. Like you don’t take it because at the end of the day they know you’re looking and they’re going to fire you tomorrow. That’s not always the case anymore.

That’s always, the logic used by recruiters- it’s such bullshit. It has the assumption that every employer is out to get you and they intentionally underpaid you. Whereas realistically, as you get older you realize, especially if you have people reporting to you, sometimes you just don’t know what’s going on in people’s heads.

You’re not omniscient. You don’t know everything that’s happening-  it’s not good, but sometimes you end up being out of the loop on certain things. And then it’s, you don’t realize that you had a big miss until someone brings it to your attention the day they resigned. And then you’re like, crap

I screwed this up. How do I make it better? Like you didn’t mean to do it, you know? So I think that’s part of it. But the other part for me is just that there’s a lot of- as you said, there’s a lot of times where counters offers make sense. The way I think recruiters should view this whole thing is put yourself in the shoes of the candidate.

If you can be honest with yourself and you think them taking a counter offer is a terrible decision for them, by all means say it. But also be honest, if you’d take that counter offer if you were them, shut up. Just let them go. Why would you make a stink about it? 

Everyone hates going back to the drawing board when you’re recruiting, I have to find another candidate, but that’s your job. It just didn’t work out and I realize there’s a level of frustration with people, but I think you just need to be honest. I also think the sooner you can identify things with candidates and the other thing I’ve always impressed in people is like run those scenarios and understand, okay

in what scenario would it make sense and understand if someone’s at counteroffer risk doesn’t mean you need to do a better sell job against them. It means you need to start finding other candidates that could potentially fit the job because it may not work out. I think it happens all the time and it’s just something that you want to be open and transparent about it.

Like, I can’t tell you that, like it’s happened a lot this year and this year is kind of an anomaly. Last year is kind of an anomaly. Maybe it’s what the market is now, but at the end of the day, understanding their point of view, understanding what would keep them there, why they stayed or or why like they might say- there’s a lot of factors that play into it. 

And if you can’t be empathetic towards it,  one- you’re probably not a good recruiter and two- you’re probably just not a good person.  I always tell people like, if they’ve got an offer at hand from their current company and I’ve got an offer for them, like it’s hard for me to be completely unbiased, but I’m going to give the positives and negatives of both and let them make that decision.

There’s no way I want to burn a bridge with a candidate just because at the end of the day they accepted an offer where they’re currently at, like that’s silly. Do what’s best for you, do what’s best for your family. Hopefully it was a good experience working with me and you want to work with me again, but at the end of the day, blocking someone on LinkedIn or not talking to them ever again because they took an offer that if that point in time they felt was better for them

that’s silly. Like there’s no reason to do that. Your credibility is worth so much more than one placement. And I think that’s the other thing too, is you need to think longer term, bigger picture. And you mentioned to me before, you’ve gotten client business out of people who have taken counteroffers before that you didn’t want them to take because you treated them like a human and they respected that.

You know, if they had a good relationship with me and it worked out and I got them a job, great but if we had a good relationship and they took a counter offer, or a  different offer, and it was still a good experience, like at the end of the day that’s that should be a large part of my job.

Ovbiosuly we want to do everything we can for our clients, but on the candidate side, if we’re not providing a good experience where they want to work with us,  analysts turn into managers, managers turn into directors, like treat everybody great and everybody will come back to you.

That’s always been my philosophy. 

I think kind of the takeaways here are the classic industry statistics are complete garbage. 30% in six months. That’s how many people actually leave. I personally, I think it’s still irrelevant because all that matters is were people happy with their decision to stay versus go?

It’s about 40, 60 people were happy that they did it versus those who felt like they made a mistake. Not surprising since these are people who are trying to leave their company to begin with, but I still think it’s close enough to 50, 50 where it’s a case by case scenario. 

You have to really evaluate things. And if you’re a recruiter it would behoove for you to put yourself, be empathetic, put yourself in your candidate shoes.  If you do think they have blinders on for some reason and they’re making a terrible decision by all means

try to help them see your way. Maybe you’ll help them out. But don’t get so attached to it that you think you’re right. No matter what, because it’s just not the case.

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