Imagine the scene: after a lengthy recruitment process, and after meeting with several applicants, you’ve narrowed down your shortlist. You’ve come to the end of a second-stage interview with a candidate. They’ve deeply impressed you and other members of the hiring team. They’ve handled every interview question impeccably; their salary expectations are reasonable. In short, they’re perfect for the job.

You’re ready to hire them. You’re confident they’ll accept the offer. In fact, you’ve already started preparing onboarding materials. Its almost time to celebrate. Despite the current talent shortage, despite everything you’ve read about how difficult talent acquisition can be in the current candidate-driven market, the recruitment process has been a success. Fetch the glasses – it’s champagne time.

Except, it isn’t. Your ideal candidate hasn’t accepted the offer. Instead, they’ve accepted a counter offer from their current employer; they’ve accepted more money or a promotion to stay with their current company.

That new hire you were so excited about has turned you down, and you’re left picking up the pieces, frantically trying to get the cork back in that bottle of bubbly.

What a disaster.

It’s a scenario that’s becoming increasingly common. If you’re reading this, its possible that you’ve already been spurned by an applicant accepting a counter offer. And like a young David Byrne, you may be asking yourself: how did I get here?

The thing is, counter offers are on the rise. Spurred on by fears of ‘the great resignation’, and with both the cost and time required to recruit new staff increasing, companies are focusing more on employee retention. That mean’s they’ll do everything they can to keep hold of their current staff, even going as far as starting a bidding war for the candidate you are looking to hire.

The stats show that only 38% of hiring managers report not making counter offers, while 57% of employees accept the counter offers made to them.

So, how can you keep candidates engaged throughout the recruitment process and ensure that they accept the offer that you make them? Let’s start from first principles.

What is a Counter Offer?

As the name suggests, a counter offer is a reactive term, signalling the action taken by an employer when a member of their staff looks to leave. It is a response to the offer the candidate will have received from a hiring company. It the last-ditch play for employers trying to change the mind of the employee who is looking to leave.

Counter offers typically involve:

  • Offering a higher salary
  • Offering a promotion or new job title
  • Offering a package of better benefits

For many employees, this can be an attractive offer, even when they had previously been looking to leave. Often, it can feel more comfortable to stick with what you know, rather than face the uncertain experience of changing jobs and going somewhere new. For individuals, it can also be very flattering – to feel that your current company values you so highly that they’ll take extra effort to keep you.

For employers, it simply makes sound business sense: the cost of losing an employee is estimated to be at least a third of that person’s annual salary. This cost will include the hiring and training their replacement, but not the salary of the new person. Losing an employee can also mean delays in projects and reduced performance from temporarily understaffed teams. Offering an improved salary or job title to a resigning staff member to entice them to stay is a minimal cost by comparison.

Yet counter offers rarely works out in the long term – either for candidates or their employers – statistically, most employees that take these offers leave within 6 months to a year following that acceptance. Sometimes, a return to the status quo just isn’t that exciting. Or sometimes money alone cannot solve the various problems causing a member of staff to want to leave.

But for recruiters and talent acquisition teams who have just lost an ideal candidate because of a counter offer from their current employer, it’s a real problem.

How to Handle a Counter Offer

Understand Reasons for Leaving

Addressing the potential of a counter offer at the interview stage is always going to be one of the best ways to mitigate the situation. Clear and transparent communication with applicants is key. It is fine to ask candidates directly about their reason for wanting to leave their current role, and how they might feel if their employer asks them to stay.

Recent research shows that only 14% of candidates say that salary is a key driver for leaving their current role. For many, it won’t simply be about money, but for those candidates that are simply seeking greater pay, be mindful that they will be susceptible to a counter offer.

Understanding this motivation means that you can avoid any potential bidding war over those applicants and instead focus attention on candidates who are interested fully in the opportunity that you are offering.

Sell the Company Culture

Its important not to underestimate the impact of a positive company culture when trying to convince prospective candidates about the role you are offering. According to Glassdoor, over 50% of employees place a higher value on a company’s culture than even salary. Make sure that a candidate understands why your company would be a great place to work – why they need to join your company rather than reverting to their current employer.

This goes beyond the communications you have with applicants in interviews. It requires building your employer brand and effectively communicating your employee value proposition through your recruitment marketing activities.

Do everything you can to develop the perception that your company is an ideal place to work. Across social channels, job boards, and your career page, communicate the benefits of working at your company. From progression opportunities, flexible working conditions, social activities, and the quality of leadership within the organisation – all of these things are why candidates should accept your offer rather than one from their current employer.

Communicate Regularly

Clear and consistent communication is a key element of delivering good candidate experience and is necessary to engage candidates throughout the recruitment process. Even beyond the issue of counter offers, 80% of jobseekers say they would be less likely to accept a role from a company that demonstrates poor communication.

Keeping candidates up to date at every stage of the process will keep them interested in the role, and a clear line of communication means that you can understand whether they have any other offers on the table – whether from their current company or from other organisations.

With recruitment software, such as Hireserve’s Applicant Tracking System (ATS), recruiters can automate much of this communication, triggering emails to applicants as they progress through the different stages of your recruitment process.

Additionally, an Applicant Tracking System would be able to automate other processes such as pre-employment checks and reference requests, streamlining the process of hiring a candidate, reducing the time and potential bottlenecks internally that usually lead to delays and periods of silence between candidates and hiring companies during recruitment.

Remember that silence can lead to uncertainty in the mind of your potential new hire, and that uncertainty can make the comfort of what they already know seem more alluring.

Using recruitment software like an Applicant Tracking System can alleviate any concern caused by a lack of communication and make the difference between a good candidate experience and a bad one. That experience can have a huge impact on whether an applicant will accept your offer or not.

Have a Backup Plan in Place

As perfect as a candidate may seem, if they’re willing to consider a counter offer, its likely that they are not fully invested in the opportunity you’re offering. The best person for the job is going to be enthusiastic about joining your organisation. So, know when its time to cut your losses and move on.

That can be easier said than done, especially if you need to start again from scratch. This is another way in which recruitment software can make a difference. Hireserve’s Applicant Tracking System includes talent pool management, allowing you to keep track of a wide pool of talented candidates with the skills and experience to work for you.

With the talent search tool organisations are better able to find and screen potential hires, cutting down the time-to-hire, so even if you do need to restart your search, it won’t be painful.

Its better to know when to walk away and find another candidate that be drawn into offering more and more money for someone who might just prefer to stay in their current role.


And you may ask yourself: how can an Applicant Tracking System from Hireserve boost your recruitment? To find out, book a demo today.

About the author

Tristan Potter

Tristan has a decade's worth of experience writing content and copy for organisations across Bristol and the Southwest of England. He has written on a diverse range of topics, including technology, philosophy, politics, and recruitment. His writing has appeared in The Drum, HR Grapevine, and The Guardian, among other publications. He joined Hireserve in March 2022.