They feel trapped.

Stuck in an endless loop of mediocrity.

A vicious circle of resentment and loathing for their employer.

When they decide to leave, a whole world of opportunities opens up to them.

They’re a great fit for your business. You’ve sold them the opportunity, and how you can help them to realise their career goals.

Then when they hand in their notice, you lose them to a counter offer from their existing employer.

This is a story we’ve heard time and time again in a candidate-driven market as competitive as the cloud & IT infrastructure space.

IT solutions providers want the best cloud talent to build their teams, but lose them in the recruitment process when they are offered more money and a different dream and their current organisation.

Why are they so prevalent? And how can you avoid losing top talent to counter offers?

Here at InfraView we know all about not only how IT solutions providers work, but also what candidates are looking for in today’s cloud jobs market.

If you’re in need of quick, personalised advice you can give us a call on 020 3617 1040 and one of our team can give their insight.

But for now, let’s learn more about what you need to know about counter offers.

Why are counter offers so prevalent?

When it comes to securing the top cloud & IT infrastructure talent, it can be counter offers that stand in the way of your next great hire.

Why are counter offers so prevalent in our niche?

Our Co-Founder Tim Davey tells us why:

“Counter offers are always around when a company doesn’t want to lose a good employee.

However they are always more prevalent in a tight candidate market.

We’re in a strange market at the moment because half the market, support and project management, is candidate rich. However the other half of the market is candidate short in terms of niche specialist positions, making counter offers much more prevalent.

So why is this?

The cost to an employer of a candidate leaving is high.

There are the recruitment costs to replace, the higher salary to make the replacement at the level of the leaver who is ultimately leaving your business for a pay rise, the cost of the time it takes for your team to recruit and train a new starter and also then the cost of losing valuable IP with the employee who leaves.

Nine times out of ten, however, counter offers are not a good idea.

It shows a lack of respect from an employer to an employee.

It’s just a short term fix and really just plasters over the bigger issues as to why the employee was looking to leave in the first place.

Nine out of ten employees who receive counter offers are looking for a new position again within six months.

An employees card is marked, ultimately simply buying time for the employer to source a replacement.

It also eats into future pay rises for the employee. If you were a candidate moving into a new role, you  would be looking to get pay rises in your new business. If they are counter offered at an existing employer, then those pay rises won’t happen.

Our advice to clients is to always look after your staff and make them feel valued! Hopefully then you won’t be in a position where a top cloud or IT infrastructure employee doesn’t want to leave in the first place.

For candidates, we advise you to always speak to your employer about your concerns. Make sure you’ve checked whether they can do anything to fix the issues before you start looking.”

Should I make a counter offer to an employee?

We now know why counter offers are so prevalent in the IT solutions provider market.

The question then is whether you as an employer should be making counter offers to your employees.

Our Co-Founder Tim Cazemage has the answers:

“As a business owner, managing a business, running a team, you understand that people will come and go.

Sometimes that will suit you and your business, and other times it won’t.

Typically, it won’t suit your business when they are:

• a key player to your business
• difficult to replace
• working on critical cloud & IT infrastructure projects
• moving to a direct competitor
• an individual who has been earmarked for a particular position

So the question is, should you make that counter offer?

Firstly you need to explore the likely outcomes if that employee stays, other options you might have to address in the situation and then identify if you should in fact make that counter offer or not.

For example, if the employee stays then evidence has shown that they will leave within the first six months prior to having been counter offered. 

Why is this?

In most cases, none of the issues which have lead that individual to want to leave have changed.

In reality, it’s not about the salary. An employee’s salary is not usually their main motivator. 

You need to think about areas such as career progression, lack of direction from management, the working environment.

They’re looking for something new. They need a challenge. Or perhaps they’ve just found a better role within a better company.

So giving them more money won’t make the problems go away.

There could be some real issues created by hurriedly putting a counter offer in place and offering a salary increase.

If this person is likely to leave anyway, when they do that salary increase could cause more problems with your existing staff. They may discover that you’re paying that individual more money and then subsequently left, leaving them looking for a salary increase. It could quite quickly cause an imbalance within your team.

There are other options.

The most important questions to ask before proposing a counter offer are:

1. Does the employee actually like the business they’re working for? 
2. If the issues were removed, can the employee see themselves working for the company?

If you don’t hear yes to both of these questions, we advise that you shake hands there and then, wish them well and leave on a professional note.

How do we prevent employees leaving in the first place?

There are a few key areas you need to focus on.

• Create a collaborative environment’
• Ensure that opinions count
• Have clear vision and values that are shared across your business
• Make sure people fully understand their role
• Have a clearly defined career progression plan for each individual
• Have open lines of communication

If your staff achieve their career goals and aspirations within your business, they will create and deliver a huge amount of value. 

If they need to achieve their goals elsewhere, wish them well and part ways professionally.”

How to avoid losing candidates to counter offers

The problem of counter offers doesn’t just affect your business when employees leave.

Counter offers could stand in the way of your next great cloud & IT infrastructure hire.

Will Martin has some great thoughts on how you can avoid losing candidates to counter offers:

“Counter offers are becoming common place in this highly competitive cloud & IT infrastructure market.

This is because the cost of losing an individual and them replacing them is far greater than just adding a few thousand pounds onto an employee’s salary.

It’s a little bit insulting to suddenly have a company rushing to give a leaving employee a higher salary, new benefits, new opportunities that they could have made available to the individual beforehand rather than presenting these upon receiving their notice.

But there are a number of ways you could counteract the effects of a counter offer when hiring new candidates.

1. Find out their motivations for leaving

It’s important you find out the reasons why an employee wants to leave their business.

Promote your culture if it’s a better fit for the individual. 47% of candidates move because they’ve found a business with a better working environment.

If they are genuinely disillusioned with your business then they should be expected to be looking at multiple new opportunities. If they’re actually looking to leave, they’re probably looking at multiple businesses.

2. Discover their salary expectations

Cover the salary.

What are they actually looking for?

If you offer a competitive salary and benefits package then present it early. That way a candidate you want to employ will know where they stand. If they then receive a counter offer from their existing employer, it may not be sufficient for them to stay where they are.

If a candidate is constantly asking about salary and seems highly money-motivated, it may be better to not even hire that individual as they may be looking for simply more money and not joining you for opportunity and to add genuine value to your business.

3. Tackle the question of counter offers

You can tackle the counter offer question head on.

Have many people left their business recently? If a company is losing multiple people then a counter offer may be more likely.

Does their existing employer have a reputation for counter-offering departing employees?

4. Stick close to your candidates

If you’re covering the counter offer outcome, pointing out the competitive nature of the market, then that is probably a last ditch effort by their employer to keep a good individual because of the cost of replacements.

Keeping your relationship strong with your candidates throughout the recruitment process paramount to avoid losing them to counter offers.

It enables you to have really honest chats with them around counter offers and to find out their motivations for leaving. Then you know when a counter offer does come in, it’s not as much of a surprise to either party. This means it will have less impact on the decision making process of the candidate on if they should join your business.

Conclusion

Counter offers are prevalent in the IT solutions provider space.

Employers don’t want to lose top talent, running up higher costs for recruitment and sourcing replacements.

By thinking about your own culture and values, as well as your offering in terms of salary and benefits, you can better understand a candidate’s motivations for leaving.

By doing that, you stand a better chance of retaining your own employees, as well as securing the best cloud & IT infrastructure talent on the market.

Need help today?

Give us a call on 020 3617 1040 or email hello@infraview.co.uk