Though overall hiring is still sluggish, highly skilled candidates are still in demand and the counteroffer can be a factor in retaining them.
“Recently, because of the economic uncertainly, it’s a little bit harder for us to get candidates to change jobs,” says Michael Stanley, a recruiter at The Daniel Group. “They’re a little less willing to make a move if they are fairly comfortable in their current position.”
Conversely, many companies are willing to make a counteroffer to retain existing employees, often because it’s cheaper and easier than replacing them, he says.
Smart Business spoke with Stanley about using counteroffer strategies to acquire and retain employees.
What steps can you take to avoid losing a job candidate to a counteroffer?
You can’t prevent a counteroffer, but you can prepare candidates to expect one. Throughout the interview, when speaking with candidates currently employed elsewhere, gauge their likelihood of making a change by asking, ‘What would your current employer have to do to keep you?’ This shows where they stand and gives insight into what an acceptable counteroffer looks like.
Also, ask about their true motivation for leaving, which can be easier to find when working with a recruiter. Candidates are usually more guarded with future employers, whereas conversations with a recruiter are much more open. It’s also important to get a full picture of their current benefits and total compensation so you know how that aligns with your company’s offering.
Additionally, it’s absolutely imperative to stay in contact with candidates because they typically provide their employer with a two-week notice before leaving. Keep them engaged during this time to lower the chances of a successful counteroffer by their current employer. Have an itinerary of the onboarding process, such as when you’re sending an offer letter and paperwork and doing background checks. It’s also a good idea to have the job candidate’s future manager take him or her to lunch.
Once a job candidate tells you about a counteroffer, what should you do?
Ask a lot of questions, such as the nature of the offer and how likely they are to accept it. Open up the lines of communication. This is when you can leverage your initial conversation that uncovered their motivation for making a move. If the candidate said there was no room for advancement and the counteroffer gives a 10 percent raise, you can start putting holes in the offer by pointing out the disconnect.
What if you can’t give more compensation to counter the counteroffer?
Use your knowledge of the candidate’s motivations, current benefits and compensation to tailor a nonmonetary incentive. Some examples are a flexible schedule, more vacation days or a guaranteed pay review after six months. An employee’s decision to leave is rarely based solely on compensation.
It’s important to know what the market is currently dictating for the open position and to not go outside of that range. If you overpay on the front end when hiring, you may not be able to provide expected raises down the road. A staffing firm, which is dialed in to compensation and benefits, can help with this.
If a current employee is leaving, should you make a counteroffer?
If the reason the employee is leaving is easily addressed, it may make sense to make an offer. But ask yourself, ‘Is this something for which I could justifiably make a concession?’ You also might learn something, as the employee leaving is likely not the only one who feels that way. In such cases an organization-wide change could improve employee morale, such as using flexible scheduling to improve work-life balance.
However, counteroffers should be used sparingly as they can create a toxic workplace environment. If other employees find out someone was given more money to stay, they may resent management and could threaten to quit. Additionally, if underlying issues aren’t resolved, you have just postponed the inevitable and the employee may end up leaving anyway.
Michael Stanley is a recruiter at The Daniel Group. Reach him at (713) 932-9313 or firstname.lastname@example.org.
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Healthy employees are happier and more productive employees, says Lisa Speaks, director of Human Resources at ASG Renaissance. A wellness program instituted three years ago has helped ASG Renaissance control health care costs, but the biggest benefits have been in increased productivity and employee retention.
“We hope we can see a decrease in insurance rates if our employees are healthier. But the other two pieces are more critical in terms of having an immediate impact on our bottom line,” Speaks says.
A 2012 report from the U.S. Department of Health showed wellness programs reduced health care costs by 20 percent to 55 percent, cut short-time sick leave by 6 percent to 32 percent and increased productivity by 2 percent to 52 percent.
“Employees spend a good portion of their waking hours at work, so the work environment can have a powerful influence on behavior,” Speaks says.
Smart Business spoke with Speaks about employee wellness programs and their benefits.
What are examples of employee wellness programs?
A wellness plan can be anything from a small health seminar held on-site for your employees to a yearlong initiative focusing on different health topics each month. For example, you might want to offer blood pressure screenings at the work site in February in recognition of Heart Health Month. The most important point is to make it convenient for your employees, so they can get the information and health screening they need without missing a lot of time away from work.
Another way to positively affect employee health is to schedule a day for a masseuse to visit the workplace. Stress can have a huge effect on your health, and relieving that stress may help your employees avoid catching a cold or flu that’s circulating in your area.
One popular program in our office has been healthy cooking classes, where we’ve brought in an outside professional to educate our employees about healthy eating and talk to them about what they eat and how it affects their body.
Once you have taken your first step in offering a wellness program, it’s important to continue to develop the program each year by adding new components. You always have to be looking for a new approach.
How do your determine what to offer?
Start by conducting an analysis of where your employees might have issues related to illness and disease. For example, asthma, weight management and diabetes are common areas of concern. There are many resources available through advocacy organizations focused on these health issues that can help you provide information to your employees explaining the risks and what they can do to alleviate the situation.
You also can work with a benefit broker, which works with firms that create wellness programs. For some programs, you might work directly with a wellness company.
ASG Renaissance has been recognized as one of the 101 Best and Brightest Companies and is invited to symposiums where managers hear what other companies are doing. Likewise, you can collect information from other firms that are interested in engaging employees and keeping them happy.
Are employees offered a participation incentive?
There are several insurance programs centered on wellness that offer incentives for participation. We offer the Healthy Blue Living Program. As part of enrollment in Healthy Blue Living, employees are encouraged to visit their primary care physician in the first 90 days of the plan year for a thorough health evaluation. Following the evaluation, their physician will develop a plan to help them improve their health. Because of their participation, employees are eligible for lower copays than if they do not participate. This doesn’t mean that employees have to meet their goals to be eligible for the plan incentive, they just need to take steps to improve their health.
How does encouraging employees to stay home when they are sick reduce absenteeism?
For a number of reasons, it’s better to stay home when you are sick than come into work and risk getting everyone else sick, too. You’re not as productive when you’re sick, and co-workers are not as productive because they are concerned that they might get sick, too. If loss of work time is an issue for your employees, telecommuting — the ability to work from home — may be a benefit to add to your wellness program.
How do you measure results?
Key measurements are absenteeism and work force productivity, which could be measured in performance reviews, retention rates and the overall wellness of employee population as measured by your insurance carriers.
ASG Renaissance has not seen direct savings yet in terms of health care costs. However, the rates haven’t increased as much as they were previously, and employees are getting better benefits out of their health care insurance for the same cost. The goal is to encourage prevention to avoid bigger issues down the line.
What steps should a company take to develop a program?
The key is to get feedback from your employees. There is no benefit gained by spending thousands of dollars on a workout facility that no one will use. The other thing is to take small steps. If you jump in and implement a full-blown wellness program from day one, it can be intimidating to employees. Develop a three-year plan and introduce one new initiative per quarter in year one, every other month in two year and then by year three have a different wellness initiative once a month. Have a strategy behind what you’re trying to accomplish.
Lisa Speaks is director of Human Resources at ASG Renaissance. Reach her at (248) 477-5046 or email@example.com.
Insights Staffing is brought to you by ASG Renaissance