Do you consider counter offers when recruiting experienced workers?

Question

This situation is specific to hiring programmers, however the question is relevant to any time a counter offer is proposed during the hiring process.

In my situation, I find it very difficult to find good experienced programmers. But let's say you find one who is available, and you make them an offer that's fair within your salary structure, and they give you a modest counter such as 5-10% of the total offer.

Part of me says, "Programmers like this are so rare, why let a small sum get in the way of hiring them?" The other part says, "This precedent will set up an annual headache."

Do you consider counter offers?

Answer 1

Hire them. You hit the nail on the head with:

"Programmers like this are so rare, why let a small sum get in the way of hiring them?"

Answer 2

Things cost what they cost, regardless of your "salary structure". If you find a good developer and they want another $1000/month, you should pay them.

Your choice is to hire the person you want and pay them what they want, or to continue searching. Presumably you have valuable work for them, and they will drive revenue that is some multiple of their salary. Interviewing a candidate for four hours costs about $500. How many more will you have to interview before you find another good developer? And when you do, will they work for less?

Here's another way to look at it: if this developer is a good hire, then $1000/month won't make much difference. If they are a bad hire, then $1000/month won't make any difference either; you'll still have to let them go. It would be very rare to find a developer whose presence was neutral: they were a hire at $90K but not at $100K.

If you really want to hire someone, and their desired salary is reasonable, you should consider offering a bit more than they asked. This won't cost much, but it will make it the candidate eager to join and give them a initial good impression of your organization.

Finally, the "annual headache" you fear will become a huge migraine if the rest of your staff discovers that they are being paid below market. You should proactively adjust the salaries of the people you want to retain before they are recruited away for a 20% raise.

Answer 3

What, exactly, does "fair within your salary structure" mean? It makes a huge difference, for example, whether your organization's salary structure is aligned with the market value of the particular sorts of people you are trying to hire. It makes a huge difference whether the offer you're making initially is in line with what others in the marketplace would offer the same developer or whether what constitutes "fair" in your organization's salary structure is 10% below the market rate.

It also matters what the organization's approach to staffing is. There are plenty of organizations, for example, that can do reasonably well hiring large numbers of very low cost developers. There are organizations that do well hiring a smaller number of median developers. And there are organizations that do well hiring a few top end developers. Different organizations have different approaches and different needs. If there is a disconnect between how the organization approaches staffing and how you want to approach staffing (i.e. you want to hire a high-end developer in an organization that is committed to hiring the cheapest developers they can get their hands on), you need to address that disconnect early on. Otherwise, even if you can make the hire by accepting the counteroffer, that developer is going to leave quickly when you can't give them appropriate raises in later years.

Answer 4

As you say, this isn't specific to programmers -- hiring someone is a negotiation, whether it is a busboy or a CEO. Counter offers are made, accepted, and rejected at all levels.

You may want to consider why they made the counter offer, did you just not offer enough money, is it reflex with them, do they have another offer on the table, etc, but fundamentally the question is how much are you willing to pay to have this person doing the work? If their counter is within the range of what you are willing to pay, then it's just a question of whether you think they will accept the previous offer or whether you should make a new one.

Answer 5

Could you find another person to do the same things for the offered sum? If so, hire the other person. If not, this programmer is probably reasonable to ask for a bit more, and he/she could probably find it elsewhere if you decline.

It's simple economics: you have a demand for high-caliber programmers and there's never enough supply in that market. As long as the person's anticipated output justifies the cost -- i.e., the person is actually worth that much -- there's nothing wrong with accepting a reasonable counter-offer.

Answer 6

In running my business I have ran into this issue and the way I found that seems to work best for my company (not saying its the best for you, however you seem willing to entertain the counter offer).

I offer them a counter-counter offer of my own. If you measure up and your as good as you say you are (and be prepared to tell them exactly what you are going to measure them against. With me its usually deadlines met, teamwork, work ethic and skill aka if you are a top class coder your not going to be hitting Google every 10 minutes looking for a answer).

Then my offer would be in 3 - 6 months offer to give them what their counteroffer and then some. In this case if they are looking 5-10% above your offer. Give them 10-15% raise.