Candidates are increasingly considering counteroffers from existing employers and competing organizations even after new employment contracts have been signed. We discuss why this phenomenon is on the rise and what you can do to improve hiring success.

There have been many discussions about the Great Resignation, but what about the Great Rescindment? Ask your colleagues about their recent recruitment experiences, and they will likely have a story of a candidate backing out after accepting an offer.

Considering the highly competitive talent market we are experiencing, it is not that surprising. Candidates will have more offers to consider, including higher counteroffers from existing employers who know that it will be harder than ever to replace them.

In a recent survey by IIC Partners, 68% of respondents shared that the competition for talent is higher now than it was before the pandemic. That is compared to just 16% who think that competition has decreased. 

But there is more to this rising — and hugely disruptive — practice. 

There appears to have been a more wide-ranging shift in business etiquette and candidate loyalty to prospective employers. We have even heard stories of when new hires do not show up for the first day of work without prior warning.  

With candidates having more options, there is a lower perceived risk of negative consequences from upsetting potential employers. There is also the feeling among many in talent acquisition that fewer in-person interactions can result in weaker ties and, therefore, a lower sense of obligation to fulfill commitments. 

Looking deeper, geopolitical concerns, global health issues, negative market forecasts, and the rise of environmental shocks have meant that for many people, it’s hard to imagine the future. In an insecure, rapidly changing environment, immediate gains can be prioritized over long-term career plans. 

All is not lost, though. If you are proactive in managing this ‘danger period’ and build strong relationships with your candidates, you can come ahead in this highly competitive environment.  

We spoke with three of our senior consultants to gather their insights into pre-boarding and how to improve hiring success.

1. Tailor your approach across regions

Notice periods for American executives can be as short as two weeks, while in the UK or Austria, under three months is rare. 

Renee Arrington, President & Chief Operating Officer at Pearson Partners International, shared that in the USA, time is of the essence, “The danger period begins much sooner and can rapidly progress. You need to act faster and preemptively mitigate risks.” 

While tailoring your approach to each country is ideal, when resources are more limited, you can build candidate personas with a range of notice periods and outline welcome journeys for each.

2. Invest in your employer brand and employee value proposition (EVP)

The focus on employer branding is often on attracting new candidates up to the point of offer. However, it also plays a vital role during pre-boarding and beyond. 

One example of the power of employer branding is when a multinational organization faced a PR storm over past ethical issues that had long been resolved. Due to their purpose-driven employer branding with key messages of positive impact on society, candidates continued to move forward in open recruitment processes and existing employees remained committed. 

Regarding the employee value proposition, top executives are frequently contacted by competing organizations to lure them away. If your competitor is better at appealing to the candidate’s strongest levers of interest, your hire will be at risk. 

“Focus on the relationship with your candidate and deeply understand their value system. This will help you align the benefits of the new role to their primary motivators.” – Charlotte Eblinger-Mitterlechner, Managing Director at Eblinger & Partner.

3. Build deeper relationships and be direct

Effectively communicating your EVP, personalized to candidate motivations, is only possible if you have a strong relationship with your prospective hires. This requires you to invest more time and effort than you may have considered in a less-competitive talent market.

Eblinger-Mitterlechner continued, “You need to maintain close contact through the entire pre-boarding period. Don’t let weeks go by without checking in or be afraid to ask difficult questions, like if the candidate is only talking with you.”

By learning about risks early, you have a chance to reiterate the benefits of your offer, and if needed, reopen negotiations as a last resort. 

Search professionals have an advantage in facilitating candid communication, as they are known for strong relationship-building skills and maintain a position as a third party. However, everyone can learn from this approach and create connections that allow for warm but direct conversations based on mutual respect.

4. Provide social and professional opportunities

With many steps in the recruitment process being handled online, providing in-person opportunities for relationship building is highly advantageous. 

For example, your hiring executive may have access to a members’ club that could serve as a great opportunity for building peer-to-peer connections in an environment that straddles professional and social. 

And while considering local laws around gifting, you could also offer access to professional opportunities, such as a visitor pass to your industry or employer-run conference. 

Knowing your candidate well means you can tailor the social offering to their preferences and ensure it is a value-add rather than an obligation. 

5. Create a pre-boarding welcome series and information pack

As an extension to the employer branding activity, plan every step in the hiring journey, from interviews to onboarding. This can include a pre-written email series with information about benefits and other aspects of the employee value proposition sent on a schedule throughout their notice period. 

For executive candidates with a higher need for personalized contact, the emails can come directly from their hiring point of contact, edited to meet their individual needs.

The welcome pack that is sent after signing the contract (and NDAs) is another key opportunity to communicate your EVP effectively. For executives, it needs to include more detailed information from employee structures and strategy documentation to stock vesting processes.

6. Prepare for late-stage counteroffers

While the idea of reopening negotiation after the contract has been signed is highly unattractive (to put it lightly), it is a requirement for some hires, especially as candidates continue to wrap up other processes with competing organizations.

Rather than it being a complete surprise, you can consider this situation before it happens and align key decision-makers around your offer ceiling and the steps required to get there. This will allow you to act quickly and confidently should renegotiation be required.

“I openly discuss counteroffers with candidates and prepare them for what may occur. I share that while existing employers may offer the sun, the moon, and the stars, it is unlikely to satisfy their deeper motivations for changing roles. And it shouldn’t take the catalyst of resignation to be offered what you deserve.” – Renee Arrington, President & Chief Operating Officer at Pearson Partners. 

7. Be wary of searching for the perfect but unattainable candidate

A successful search is not about securing the perfect candidate at all costs. You must also consider your budget, hiring timeline, and risk of early departure. With many assignments, timely hiring of the executive is the difference between hitting or missing critical business objectives.  

“Hiring success in this market environment is about finding ‘doable deals’ and getting comfortable with the 85% solution that is motivated and ready to join vs the 100% solution that will be difficult to bring on board.”  – Sam Dinte, President at Dinte Executive Search

Your search partner will often indicate which candidate could be a flight risk. Provided you have a strong relationship and trust their expertise, be sure to take their council to heart. Maintaining an open and collaborative approach will help you to choose the candidate most likely to deliver long-term success and least likely to rescind their acceptance.

8. Stay connected in the market until the start date

Another essential strategy raised by Dinte is to stay active and connected in the talent market until the chosen candidate starts their position. 

“Great search consultants can influence and guide candidates towards making positive decisions, however, it is difficult to entirely control. We continue to search for and build relationships with market leaders until the executive is fully onboarded. If the unexpected happens, we can quickly present new highly-qualified candidates and keep the search on track.”

Conclusion

The employers who go the extra mile in building solid relationships with new hires — even before their start date — win in talent acquisition and retention. When creating your hiring plan, map the candidate journey from the first contact through to the onboarding process. If you face late-stage or post-contract counteroffers, try to accept it as a byproduct of fierce competition for talent rather than a reflection of the candidate’s moral compass. A dedicated executive search partner or talent acquisition team who identifies and actively plans for hiring risks will empower you to act quickly and confidently if problems arise. The right preparation and attitude will put you miles ahead of the competition.  

Contributors

Charlotte Eblinger-Mitterlechner, Managing Director at Eblinger & Partner, is a Pharma & Life Sciences specialist who conducts search and talent assessments for her clients. As an expert in HR Development, she is a trainer, a coach, and a well-known speaker.

Renee Arrington, President & Chief Operating Officer at Pearson Partners International, is a strategic thinker who connects the dots and excels in recruiting board and executive talent for Fortune 500 companies, private-equity-backed businesses, and not-for-profit organizations across many industries.

Sam Dinte, President at Dinte Executive Search, is an Aerospace & Defense specialist who conducts search and talent assessments for corporations spanning the value chain as well as leading financial sponsors. As an expert in commercial aerospace, Mr. Dinte has published several white papers and presented at industry conferences.