To stay or not to stay: that is the question.

It’s no secret that we are seeing a shortage of proven talent within the real estate development and construction industries in many skill sets.  At a time when we need people/talent the most,  professionals are seriously questioning whether to make a change because of the timing of the economy, timing in our industry and timing in their own lives.

“Is it time to make a move in my career?” These thoughts, nerves, doubts are making it more difficult today to recruit proven, successful talent for open positions due to growth or vacancy.

Many clients are forced to promote people who aren’t ready to take on more responsibility because of the talent shortage, and starting a leadership program within companies won’t grow the talent fast enough to fill the needs.

In my practice, I speak daily with and recruit Vice Presidents, Division and Regional Presidents and professionals in Corporate level roles. Professionals are asking themselves “should I stay or should I go?” for a few reasons:

  1.  Recent builder acquisitions. Executives who are open to considering opportunities or desire that next step in their career are asking themselves, “Am I going to a builder that is gobbling or one that will be gobbled?” Since company CEO’s or Corporate CFO’s cannot share this information, professionals are left to the worry about the rumors and, therefore, may choose to stay rather than risk being the last person hired when a company is “gobbled.”  People do not want to be the less tenured in this case because some say the purchaser will keep most of their own team if in the same market. So be honest with interested candidates. It still may prevent someone taking a position with your company but at least you stayed true to what you know. Also know, even if it doesn’t feel like the case, builders are starting to interview all candidates in like roles within that market seriously so they can build the next best team.
  2. The next downturn.   Those of us who survived the last downturn always have our eye on the future, looking for signs that it may happen again.  While economic indicators are still very strong, professionals want to ensure they’re working for a company that isn’t in danger of going under if it does happen, either because of their financial situation or land holdings.  But professionals need to remember that the people working at the company they’re interviewing with likely survived the last downturn as well, and everyone in our industry made adjustments to their financial forecasting, land strategy, and processes to weather that storm should it arrive.  They are making hiring decisions based on long-term, not just short-term, growth projections.
  3. Counteroffers.  When people are hard to find, companies do what they can to keep the good people they have.  So companies making offers should expect counteroffers each and every time.  And to prevent the professional from staying put, companies should make their first offer their best offer.  The days of negotiating back and forth to save a few bucks are long gone.  If you don’t demonstrate to a candidate their value to you right off the bat, you can bet their existing company will, and you’ve lost valuable time in your search to fill that role.  It helps to have consultants like Joseph Chris Partners in on the formulation of offers so you can offer competitively based on market conditions and competition.

Our industry will always have mergers and acquisitions and there will be lay-offs during any economic slow down we experience. But that should not stop a strong professional from accepting a new role, proving their worth, and moving up the ladder.  If the opportunity is a great one, the company has the culture people thrive in, the team is strong and collaborative, then the normal things that affect our industry should not keep a professional from taking on a new position.

Joseph Chris Partners can help you with your search for the right professional, and we can help them answer “should I stay or should I go” in your favor!

Employers…Please Don’t Make Counteroffers!

So…your star employee has come to you to resign. They tell you that they have a job offer with a 10% increase in compensation. Your mind goes into overdrive about what is due, what is not done, reports, staff morale. And all you want to do is make a counter offer…don’t.

And here are the reasons why:

1. Most employees who accept counteroffers leave within 12 months. When an employee starts looking for a new job, you have already lost them. The percentage of people who leave after accepting a counteroffer is from 85% to 90%.

2. Other employees in your department/company know that if someone goes in to resign and end up staying…they got an increase in pay. This tends to make your other employees disgruntled.

3. There are few people who are 100% happy in their job and it is highly unlikely that a job offer randomly presents itself. Most people who change jobs have been looking…for months.

4. Compensation. Some employees do leave because they do not feel they are compensated adequately but the majority leave because they are not happy with their manager or management.

5. When another company gives your employee a job offer making more money than they are currently making, it does two things, it makes them feel valued by the new company and unappreciated by their current company. Not good for the current company.

6. You made the counteroffer and the employee accepted it. You, the employer becomes bitter, feeling like the employee used “both companies” to enhance their compensation. Suddenly, no more star employee. Everyone is miserable.

7. What happens when everyone is miserable? Employee is going to find another job or employer is going to end up firing star employee. Not good. For anyone.

So, to keep yourself from ending up in this situation, here are some suggestions employers might want to think about:

1. Employers often assume that if no one is complaining, everyone is happy. Not true. Keep a check on your employees morale. One unhappy employee can put a strain on the entire team.

2. If you know your star employee is not being compensated based on market value and the cost of losing them would be high, pay the employee market value. Don’t wait until they walk in to resign.

3. If an employer loses a star employee, it typically costs them 6 months of lost time for, the cost and effort to rehire, the loss of knowledge and experience, training of new employee, loss in productivity, cost of new employees salary, as you will probably be paying more than the employee who left and damage to employee morale.

If you are blind-sided and end up in this predicament, here are some suggestions employers might want to think about:

1. Tell all employees when they come in to resign, “Congratulations on your new job” “I wish you all the best” “XYZ Company will be fortunate to have you” “Maybe we will work together again in the future.”

2. Tell all employees who ask for a counteroffer when they resign, “That is a significant increase, I am sad to see you leave but I also do not want to stand in the way of your career.” If they say, they would stay if they receive a raise, you should be firm but nice and say, “We all want raises, I can not offer/promise anything but your salary will be evaluated at year end.” End with, let me know your decision by this date.

3. If the employee leaves, ask them for a transition plan and if they have a recommendation to replace them.

4. Look at your star employees and make sure you are paying them market value or a little bit higher.

Bottom line, please don’t make counteroffers.