Negotiating job offers was never so challenging for Gauri Sarin, president, Approach Talent Solutions Pvt. Ltd, an executive search firm.
“These days, I am having to renegotiate eight out of 10 new job offers and on average five out of 10 candidates decline renegotiated offers,” she says. Earlier, at best two candidates out of 10 declined renegotiated offers, she adds.
The trend of candidates declining new job offers comes even as firms are increasingly becoming flexible in terms of salary structures and fitment.
“If last year saw three out of 10 candidates dropping out before the joining date, the number has gone up to almost six out of 10 candidates this year,” says Sarin.
Sangeeta Sabharwal, chief executive officer of Kochchar Group, a senior executive search firm, is grappling with the same problem. “In the past one month, three senior India professionals from the pharma and chemicals sectors dropped out after accepting offer lette-rs. They cited money as the re-ason for opting out,” she says.
Sarin and Sabharwal are not the only ones stuck in the quandary of declined offers. Executives across leading search firms such as Access India Pvt. Ltd, Stanton Chase International, K&J Search Consultants Pvt. Ltd and Shilputsi Consultants are fighting the same challenge.
According to headhunters, the average number of mid-level professionals declining offers rose 20-25% in 2008 as against 10-15% in 2007. The number in case of junior-level professionals with 0-5 years experience has gone up 30-35% from around 20% during the same period.
“Today, most candidates are playing with a couple of offers and also a counter offer from the serving company,” says Abha Kapoor, director, K&J Search Consultants.
Recruiters say the last two quarters have seen the number of candidates declining offers almost double. They attribute this to an increase in number of jobs and short supply of talent. “The trend of counter-offers has also caught on. Many firms are making counter-offers now to retain talent,” says Ananth Iyer, director, Shilputsi Consultants. Recruiters point out since the cost of acquiring a new employee is more than retaining one, more firms are making counter offers today.
“It’s a market that is marked with lack of quality people and increasing demand for manpower from new businesses and relatively new sectors,” says R. Sankar, executive director, PricewaterhouseCoopers Pvt. Ltd. “So, even moderately decent candidates today have a lot of opportunities.”
Firms, in fact, are going out of their way to keep their flock together. Sarin cites a recent instance where a sales professional from a multinational online portal with more than 10 years of experience was being placed for another Internet start-up. He negotiated a 60% raise in his current salary of Rs25-30 lakh and four days before the date of joining, he called to express his inability to join. “He said his current employer had given him a matching salary and he was under tremendous pressure to stay back,” says Sarin.
A number of firms which as a policy don’t make counter offers to avoid being armtwisted by staff into giving salary hikes or promotions, are trying various ways such as overseas assignments, role change, employee stock options and funding children’s education abro-ad to keep staff from leaving.
“We do try to find out why an employee is leaving and address the needs in most cases, except when the person is lea-ving for better compensation,” says Arun Kumar, executive vice-president, human resour-ces, Godfrey Phillips India Ltd.
To tackle the issue, search fi-rms are banking more on market intelligence, back-up candidates and quick placement deals. “Candidates are more li-kely to procrastinate when fac-ed with multiple offers and gi-ve in to pressure from serving firm if given a lot of time,” says Charul Madan, partner, Executive Access India. “We advise our clients to buy out notice periods to avoid casualties.”
Meanwhile, recruiters say the number of rejected offers is going to rise further this quarter because of the appraisal season setting in. This is also the time when firms look to hire more people. “Its a cyclical thing,” says Iyer. “A higher number of candidates approach placement firms during this time to assess what the market has to offer so they can jump the fence if things don’t work out their way at their current employer’s,” he adds.