10 Nov Counter Offers and Boomerangs
When demand for staff is running high, chances are an anticipated new employee will receive a counter offer. A counter offer describes the situation whereby an existing employer receives a resignation letter and decides to offer an improved renumeration package to encourage a key staff member to stay.
Many legal practices are combatting both the retention of top team members and the attraction of great candidates at the same time. Currently about one third of legal employees, who choose to resign from a role, will receive a counter offer from their current employer. While the promise of extra benefits, money, or additional responsibilities might be tempting, accepting a counter offer could ultimately prove a bad move for the employee. Here are some reasons why refraining from presenting a counter offer, or saying “No” to a counter offer, is usually the wisest choice.
• Unfortunately, according to statistics, around 80% of the people who accept counter offers end up leaving their original employer within six months anyway, as many underlying issues remain.
• There’s a good chance considerable time has been spent thinking about the pros and cons of leaving a role. Counter offers may address one problem (such as salary), but rarely address every issue that convinced someone to go.
• The employer may now have questions about the employee’s loyalty after they accept their counter offer. Future promotions may be off the table, as they consider the employee a flight risk.
• For the employee, staying with the existing firm could mean missing out on opportunities to expand both skills and experience. The employee ends up standing still.
• The employee will also be left constantly wondering what would have happened if they had followed through and changed firms.
• Employees who accept counter offers find themselves under pressure to perform like a new hire all over again and will likely, in the medium term, leave as a result.
With the current increased frequency of counter offers, the period between offer and start date is resulting in a new challenge to legal practices. As such it is important, when new hire fills a strategically important role, that the first offer to an ideal candidate should always be the future employers best offer.
If a key employee does decide to move, it may not be all bad news for the existing employer – as they may be able to re-secure a previous employee later on in their career. Rehires (“boomerangs”) tend to be high performers who left their old job for an unexpected reason, like having to move away for a partner’s job, to start a family, or to accept a surprise job offer they couldn’t refuse at the time. Later on in their career, a previous employer can benefit from rehiring the past employee, especially for senior roles such as Associate and above. Deciding to bring a “boomerang” employee back into the firm can be a speedier and more rewarding option. Less time, energy, and money will be spent on onboarding and it can make for a more reliable hire, as the firm is familiar with the previous employee’s strengths and weaknesses.
Although a firm may feel that they are losing out when a key staff member leaves, it is important to keep options open and end things in the best possible way. The departing staff member should feel as though they will be missed and welcome back later on in their career. Recent research has shown that 30% of previous employees would actively consider returning if a suitable role became available later on in their career. With employment, flexibility and mobility continuing to increase, legal practices should be prepared to field increasing levels of interest in their roles from former staff members. After all, if the boomerang is thrown right, chances are it will return.