For a hiring company engaged in an executive search, a candidate’s counteroffer can be like getting 26 miles into a marathon and being told to go back to the starting line. All that time and energy you put into searching, interviewing and negotiating – and now you have to do it all over again. Recovering after a counteroffer surprise is tough, and the best remedy is to figure out how to avoid it the next time.

The prevailing advice to candidates is not to accept counteroffers, but it still happens quite a bit. Harvard Business Review cites an increase in counteroffers in recent years but cautioned that nearly 80% of executives surveyed in a recent report said that accepting one would diminish a candidate’s reputation at their current company. Roughly the same number of executives said accepting counteroffer would also harm the candidate’s reputation with the company they turn down.

Why candidates accept counteroffers

If it might damage their career in the long run, what makes a candidate take a counteroffer when they’ve gone to all the trouble to interview for a new position?

The top reason, money, is exactly the reason you shouldn’t want the candidate in the first place. Anyone who’s willing to leave for a salary increase alone will soon leave your company for the same reason. A candidate must want more than just more money for them to be a good fit for your business.

Of course, there are a number of other reasons a candidate might be tempted to stay at their current company in addition to (or instead of) a salary boost.

  • A better position or title. Perhaps feeling underappreciated at their current employer, a candidate wanted to test the waters to see what else was out there. But when a counteroffer comes their way that includes a more prestigious title or better position, they might feel the validation they’d been looking for and opt to stay.
  • Complacency. People are creatures of habit, and though the idea of moving on might have been intriguing, the pull of a familiar office, coworkers and job duties might seem like the easier route if their current employer is trying to get them to stay.
  • Loyalty and/or ego. The candidate’s current employer might panic when they hear the candidate intends to leave and start offering a litany of reasons the candidate is invaluable and can’t leave. The feeling of being indispensable or the allegiance to a company they’ve been with for several years might be more than the candidate can resist.

What to do when a counteroffer is accepted

When a candidate you’ve chosen tells you they’re accepting their current company’s counteroffer for any of these reasons, there’s not a lot you can do. Of course, you can counter the counteroffer, but the candidate has already demonstrated that they’re not fully committed to changing jobs. Any offer you make isn’t likely to change their minds, and if you did persuade them, you would start off your working relationship on a very awkward, potentially resentful foot.

Now you’re starting over and you don’t want the make the same mistakes twice. You’ve already spent time and money to perform the first search, and you’ve lost the value and productivity of that position as you’ve been looking. Executive search isn’t easy, and finding a whole new batch of qualified candidates will be a tall order.

How to avoid dealing with a counteroffer

To prevent a counteroffer surprise in future searches, it’s important to start with a solid plan and understanding of what you need from a candidate. Once you’ve established the need and who can fulfill it, keep these tips in mind as you interview.

Dig for the real reasons the candidate seeks a change.  

Are they looking for a more balanced work life? Do they want opportunities to lead or a bigger challenge? Do they want more time for community service or coaching their kid’s team? Sure, everyone would like a bigger salary, but by probing for other reasons for change, you’ll find out what kind of fit they’ll be in your organization and how you can meet their needs as well.

Be crystal clear about what you’re offering.

Once you’ve figured out more about what your chosen candidate desires from their next position, provide examples of other people on your team who have had similar concerns and how your company has worked with them on it. If you can be flexible on vacation time, tell them that. If you offer unique benefits they don’t have now, detail those. Give them every reason to get excited about the offer you’ll be making them – reasons that will stand up to a panicked counteroffer from their current employer.

Work with an engaged search firm that will head counteroffers off at the pass.

In engaged search, we work with the candidates we find for you during the entire process to ensure they won’t fall prey to a counteroffer. We know the tactics companies will use to get a candidate to stay, so we make sure any candidate we present has been prepped to stand firm. If we identify any potential they have to be swayed by a counteroffer, we won’t bring them to you. We won’t waste your time, money or effort on someone who won’t be excited to join your team.

Counteroffers during an executive search can really set your company back in both productivity and morale. They’re disappointing, and they cost you money and wasted time. But if you take the time to understand what a candidate really wants from their next position, you’ll be prepared to make them an offer that can’t be countered.