How should you handle counteroffers in the current market?

2022 may have been just three years ago, but in some respects it feels like a different world. Back then, we were still emerging into a fragile, COVID-affected economy, and the pandemic’s effects on hiring were certainly dramatic.The Great Resignationmeant that jobseekers briefly enjoyed a buyers’ market. However,economic pressures,geopolitical instability, and the rise ofAI– among myriad other factors – have all contributed to more cautious hiring patterns across various industries recently.

It is with this context in mind that we wanted to revisit a topicwe last wrote aboutin November 2022: counteroffers. How much of our advice still applies – and what else has shifted in the sectors we represent since?

The job market in aviation is interesting right now. All the data suggests that there are not many roles open, so you would expect that instances of counteroffers would drop. However, the opposite has been the case – particularly in North America – compared to what we might typically expect. It is not immediately clear where these offers are coming from. Perhaps candidates are less active through their own volition, and the relative jump in counteroffers is a response to confidential approaches.

Here’s our Aviation DirectorJames Parker’s take:

More counteroffers could suggest that certain skillsets remain particularly valuable, but much of it likely comes down to companies wanting to keep experienced talent. Organisations are less inclined to source new candidates if they can hold on to existing employees for the sake of a 20% salary hike. Anecdotal evidence we’ve heard seems to bear this out – along with recruitment being predominantly driven at mid- to senior levels, rather than among executives.

It’s not that candidates are letting go of their frustrations by taking a new role; I suspect many are just staying for the money. That seems to raise some concerning questions about how people are managing their careers. Are they being naïve by accepting a counteroffer? Once you say yes to your employer’s proposal, the reality is that in many cases your card is marked. Often, your loyalty will be questioned going forward. Accepting a counteroffer might suggest you weren’t unhappy to begin with, and the rival proposal wasn’t enough to entice you to leave. But if you get to an offer stage, your head must have been at least partly turned.

So, it seems that some aviation companies are concerned about how long it takes to recruit. We’re seeing candidates accept counteroffers largely as financially driven decisions – and one way of avoiding this situation outright is to ensure strong compensation packages in the first instance.

Gov Kandola, Senior Consultant for our Transport & Logistics practice, advises that this is happening in his sector in North America at present. ‘We’re seeing top talent being held onto more tightly than ever, often with long-term incentives to keep candidates in place,’ he says. ‘The market might be quiet right now, but the companies preparing ahead by securing their top talent will be in the strongest position to capture extra market shares when things do eventually pick up.’

Market trends might fluctuate, but we are glad to report that when it comes to counteroffers, common sense is evergreen. The advice we provided the last time we wrote about this subject still holds – so let’s revisit some key points, in case you find yourself on either side of a counteroffer.

First of all, don’t panic!

Handing in your notice only to receive a counteroffer might seem stressful, but it’s important to remind yourself that having a choice of roles is a good position to be in.

Don’t make any sudden decisions.

Acknowledge receipt graciously and ask your boss for a day or two to think it over. Just bear in mind that you can’t leave it much longer, or you risk ending up with nothing.

Think about what made you consider another proposal.

We advise against handing in your notice purely to look for a pay bump. It may count against you at work – and you risk burning your bridges externally, too. If you considered an outside offer for other reasons, it’s important to reflect on whether you might have more room to grow elsewhere.

Discuss your counteroffer internally.

Your line manager might already be aware of any issues you may have with your current workplace. If you’re citing your grievances as reasons for your resignation, and your manager tells you that things are about to change, you should probably listen to what they’ve got in mind.

Most importantly: handle your decision with grace.

Turning down either the original or counteroffer sensitively is not only the right thing to do – it’s worth remembering that industries are small, and you don’t want to sever ties with contacts that may yet prove useful to you in the future.

The first principle is the same – don’t rush.

Be clear as to your organisation’s stance on counteroffers. If an employee hands in their notice, don’t do anything sudden or make a promise you can’t follow up on.

Acknowledge receipt, then consider what might have made them look elsewhere.

Don’t throw money at the problem. Your candidate may be looking for a higher salary – but there’s every chance they also want more flexibility, responsibility, a fresh challenge, or to experience a different company culture.

Get HR involved.

If you decide you’d really rather keep this individual, loop in your HR department as soon as possible. This will help to ensure you offer commitments that you can honour, as well as keep your internal equity balanced.

Short-term gain, long-term pain?

Will your counteroffer have a negative impact on your wider team? Remember that people talk. Furthermore, presenting your current employee with a counterproposal might save you the short-term hassle of recruiting and training a new hire – but will it affect your long-term strategy?

Keep an eye on your wider talent pool.

Continue adding to your network of prospective candidates and ensuring you’ve laid the groundwork for your succession planning. Developing your own talent internally is crucial to this end – as is engaging and maintaining a relationship with a search firm. ‘As sector specialists, it is not only our responsibility to manage the offer process, but also to work with our clients to ensure they have multiple candidates under consideration,’ saysAdam Fell, our Senior Aviation & Aerospace Consultant. ‘That way, when a counteroffer is accepted, there is always a Plan B.’

Whether you’re receiving or making a counteroffer, we hope you can always find solutions that work best for you. If you would like advice on how best to handle this process as an employer – or if you are a candidate considering a move – don’t hesitate toget in touch with us.

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