It’s a candidate’s market.
It’s a phrase we hear so much at the moment it’s almost up there with “the new normal” for cliches we should leave in 2021.
But it’s a fact, the demand for good quality, skilled candidates far outweighs supply meaning that hanging on to your talent is more important that ever before. While we would predict that this will even out a bit towards the end of the year, right now, we are definitely experiencing a huge increase in candidates receiving counter offers.
And not just a token offer either. Companies are desperate to retain their employees, and this is reflected in the proposals being made. In a normal market, you can expect candidates to get countered c10-15%. We are currently seeing counter offers in the region of 15-25%.
Three main factors are contributing to this. The fact that supply versus demand is out of kilter and companies simply can’t risk losing their talent to their competitors. Staggering inflation rates are shifting the importance of salary meaning people are willing to push harder for salary increases. And, as many businesses are increasing their headcounts, there is often more scope for promotion or career progression.
All three factors have created the perfect storm and companies faced with a letter of resignation are more than willing to offer more money or bigger jobs.
If your candidate is as good as you think they are, then they will be counter offered. Don’t let this come as a surprise. There are the odd companies (often public sector companies) who have a blanket ban on counter offering, but this is the exception not the rule.
Getting to the root of why they would be interested in changing roles means that you can then target your sales strategy accordingly.
The more delays in the process, the more likely you are to lose your candidate. If you have a lengthy process with weeks in between interview stages and then a convoluted offer process that needs to be signed off by every Director and their dog, the chances are your candidates will lose interest, lose faith in you as a business and that shiny counter offer is going to look very appealing.
If delays are unavoidable, then explain the situation and keep candidates updated. If the process is smooth you stand a much better chance of securing a candidate.
I cannot stress enough the importance of regular contact with your candidates. As a headhunter, we can of course touch base with prospects frequently and keep them in the loop regarding the process. But ultimately, they won’t be working with us.
You have to assume that their line manager is sitting down with them every day, maybe twice a day, and doing everything they possibly can to convince them to stay. If they haven’t heard from you for two weeks, they’re going to start doubting their decision to leave.
Don’t try and get away with the bare minimum offer and enter into lengthy negotiations. You won’t win.
Really consider the offer that you are going to make, circling back to what the candidate’s motivations to leave are. Salary isn’t everything, but at the moment it is more important than ever before.
If you can’t financially compete with the counter offer they have been made, be clear on why and emphasise the other benefits the move will bring them.
While we don’t think that the market will stay this way forever, it is the reality we are facing at the moment. Don’t risk losing quality talent at the last hurdle.
We are often asked by clients to provide salary benchmarking information and we are always happy to have an honest and open discussion on salary expectations. If you would like to find out more information on our salary benchmarking service, you can read more here.