Declan Rice – the biggest counteroffer ever?
The hottest topic in our house at the moment is…will Declan Rice be signing for Arsenal? Whilst my nearest and dearest know I’m not a football fan and can’t hold a conversation in this area, my husband and son have been sharing updates with each other all week, will he/won’t he move to their beloved Arsenal. I’m sorry to say I don’t hold the same passion about the possible new star for their team, but it’s fascinating seeing the one of the largest ever counteroffers play out in public.
Arsenal has made a third record-breaking bid of £105m for Declan Rice, a 20-year-old central midfielder who currently plays for West Ham and one of the most highly rated players of his generation. So, why have West Ham made such a large counteroffer and why are Arsenal prepared to pay so much for their new “employee”? It’s simple, West Ham want to keep Rice at the club, it’s a bold move but it sends out a message that the club is committed to keeping hold of its best players. Declan Rice made his professional debut in 2015 with West Ham, and has since forged a successful career with them, amassing a wealth of experience. So, West Ham have made a counteroffer, believed to be a long-term contract and a very attractive salary increase, to the footballer.
Similar to any other business, West Ham had to make a decision – is it worth trying to keep one of their top players? It could be more costly for them to have to replace him, not just financially but also in terms of performance. There are lots of pros and cons to counteroffers both for employers and employees. A counteroffer is usually made to a resigning employee with the expressed intention of retaining the employee in their role. Essentially, the counteroffer is a way of creating a new employment contract, renegotiating terms and conditions. How should employees respond to it and is it advisable for both employer and employee?
Given the current skills shortage, the concept of job counteroffers has gained significant traction. The motivations for the usage of counteroffers have also evolved as certain industries have become more competitive. Here are a few reasons why companies may make counteroffers:
- Employee Retention - If there's an exceptional employee who is performing above and beyond expectations, then it makes sense for a company to want to keep them
- Cost Savings - The cost of recruiting a new employee far outweighs the cost of making a counteroffer, taking the time to find a new employee, review applications, interview candidates and onboard them is costly
- Team Impact and Productivity – The departure of a key team member can have a major impact on the remainder of the team, including decreased productivity
- Timing – It’s taking longer to hire the right talent so counteroffers could mean business avoid having a gap within a team
However, counteroffers are not always the simplest answer, it needs real thought on both sides.
- Employees can secure a better financial package but the reasons why they have decided to look for a new role are probably still there, the increase won’t be enough to keep them there for long
- Employees can negotiate better work hours, such as flexible working arrangements, however, this may not be possible company-wide and can cause issues long-term within teams
- The employer-employee relationship is tried and tested, it’s easier to stay in a job or keep an employee in comparison to the unknown or having to recruit or move jobs, although taking the easy route isn’t always the answer
- If an employee is feeling like it’s time to move, a counteroffer may be too little, too late and could send the wrong message to other employees, it’s reactive rather than proactive and can create a culture of resignation-counteroffer
- Counteroffers can create greater loyalty and engagement, employees can feel an increased sense of appreciation by a company, however, this comes at a financial cost and, therefore, higher expectations of the employee
The crucial point to think about as a company is, what is the overall impact of losing that particular member of staff and would a counteroffer have a positive or negative impact to the wider team? And, for the employee, does a counteroffer solve all of the issues which led you to taking the bold step of handing in your notice in the first place? What are the pros and cons, always consider the bigger picture.
Ultimately, the decision to accept a counteroffer is down to the individual. Businesses need to consider the current employee (their skills, experience and cultural fit) vs the impact of them leaving (loss of skills, team productivity and a new person joining). Employees have to make the decision whether their career aspirations and long-term financial needs can be met beyond the initial counteroffer.
Whilst many employers and employees will be making some tough counteroffer decisions this weekend, I know the pressing question in my house will be whether West Ham will increase their offer to Declan Rice to stay or will Arsenal be more aggressive with their terms?