6 Tips for Dealing with the Great Renege-ation

The so-called Great Resignation was the topic of a previous post on this blog, and the following piece is a spin-off from that. That prior post focused on employee retention, as have so many recent articles. But we’ve experienced a separate challenge at Lock 8 that also bears discussion — how to get job candidates to actually leave their old company in order to join ours. To be clear, this isn’t a question of how to craft compelling job offers in an historically candidate-friendly market — that’s also rich topic that has been well-covered. Rather, this is about getting candidates who’ve formally accepted offers to actually follow-through on those commitments and show-up for Day 1 in their new company. Seems simple enough, but this challenge is proving to be non-trivial.

Admittedly, there is always risk associated with attractive candidates reconsidering their acceptances of offers, but we’ve seen an explosion of this practice lately. This appears to be yet another employer-focused disruption amid the broader upheaval of the Great Resignation — so much so that we’ve begun internally calling this practice the “Great Renege-ation.” This trend prompted us to consider tactics aimed at ensuring a higher “start-date” yield among accepted offers. Below are a few of the observations, lessons-learned, and things-we’ll-do-differently-next-time:

1. Ask Hard Questions: It’s common practice to evaluate someone’s “want-to factor” by explicitly asking why they want to land the job we’re trying to fill. Nowadays, we clearly need to go further and also ask (repeatedly) why they are looking in the first place, what is motivating them to consider leaving their current gig, and what it will take to get them to jump? We also need to fight our own long-held biases in assessing responses to such questions. Historically, attractive candidates often already had good jobs and weren’t looking for new ones. But in the upside-down world we now inhabit, that’s problematic. Unless someone is discernably motivated to leave their current situation, the risk is high that they won’t ultimately end up doing so. Why? Because desperate current employers (especially big company ones from which small-scale SaaS businesses often recruit talent) are desperate to keep high-performing team-members. Accordingly, the incumbents have temporary license to throw money at the problem and counter-offer employees with big pay-bumps aimed at convincing them to stay.
2. Expect a Counter: Given the point above, it’s critical to prepare candidates to expect a counter-offer from their current employer. We’ve found this to be particularly true with more junior professionals, who are surprised and disarmed when their current employer makes a concerted effort to retain them. Our experience is that an ounce of prevention is worth a pound of cure against company counter-offers. Specifically, when employees are forewarned in advance to expect a counter-offer, they are forearmed with how to graciously sidestep them. Alas, if unexpecting employees give oxygen to counter-offer discussions, we as “newco” often find ourselves in a bidding war that we can rarely win.
3. Recall the Past: As part of preparing candidates to expect a counter-offer from their existing employers, it’s key to remind them what led them to job-seek in the first place. Revisiting responses to the “hard questions” above is certainly fair game. It’s also worth asking candidates where their employer was hiding all of those salary-escalations and title-bumps prior to their having given notice. While these can certainly be delicate conversations, they are often effective when handled deftly. At the very least, they should give job-stayers pause to consider how their career will progress at their current company (particularly a year or so down the line when the labor market inevitably cools a bit).
4. Sell the Future: It’s also important to ABC (Always Be Closing) by reminding the candidate of the exciting opportunity ahead. The autonomy, breadth of responsibility, opportunity to elevate their role in a smaller organization are often appealing aspects of the move they had been planning. Likewise, key differentiators of the new opportunity include contributing centrally to building a business from an early stage and participating in an options plan that rewards value-creation. For the right candidates, there are few things more enticing than that…but they may need reminders to help them make the leap.
5. Speed to Close: In an effort to avoid counter-offers entirely, try to not mess around much with the number of days between interviews. It can be worth sacrificing a bit on getting unanimous team buy-in in exchange for moving quickly (we learned this the hard way after losing good candidates by waiting too long to produce an offer. If you see someone you like offer) ASAP…even to the point of closing before candidates leave the interview. It shows they are not in second place and you mean business — like all of us, candidates want to be wanted! At the very least, it is more important than ever to stay connected to the candidate between offer acceptance and start date and eliminate any lulls in communication.
6. Pre-Boarding Starts Now: Our portfolio companies are having success initiating small scale and lightweight “onboarding” steps even prior to the candidate starting. This starts with the hiring manager keeping an on-going dialogue to monitor the candidate’s tone, level of excitement and reconfirm the resignation process is on track. Quickly this transitions to inviting them to meet their colleagues (e.g.; company or team meeting or virtual happy hour), sharing pre-reading materials and/or casual discussions about ongoings in the business they will have the opportunity to be part of, or even lead.

Bonus Tactic: While most of this piece focuses on closing candidates, it’s worth finishing with a downstream point about the new employee lifecycle. An element of surprise can be really helpful 6 months into someone’s tenure, such as providing an unexpected pay bump or options grant. Getting some re-enforcement that they are doing a good job and surprising them is a nice way to build stickier relationships with newer team members.

It’s a talent arms-race out there…anything we can do to get a leg-up amid the Great Resignation / Great Renege-ation is worth considering in this high-stakes game.