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To Have And To Hold

News: Analysis & Commentary: RECRUITING


David R. Brousell was almost out the door. He was set to resign in April from his job as director of market research for Sentry Publishing Co., a small Massachusetts publisher. New York-based Ziff-Davis Publishing Co. had offered him new duties overseeing a startup magazine, a larger staff, and a pay raise. What happened when he tendered his resignation still amazes Brousell, 42. His employer made an unexpected counteroffer too good to refuse. Today, Brousell is Sentry's newest vice-president--with an equity stake. "It almost knocked me for a loop," Brousell says. "I expected a goodbye."

After years of downsizing, employers increasingly are one-upping headhunters trying to poach top-notch managers. Companies have long fought to hold on to their CEOs, of course. But now, recruiters say, counteroffers more often are being used to retain middle managers. "Our position is: We'll do everything we can to find, attract, and retain the absolute best employees," says Jim Hebe, CEO of Freightliner Corp., a Portland (Ore.) truckmaker that in the past couple of years has begun routinely making counteroffers. "We'll fight tooth and toenail to keep them."

BIDS. There are no nationwide figures on counteroffers. But search firm Boyden Consulting Corp. says about one in seven candidates now is retained by counteroffers, vs. few before. "The incidence and intensity of counteroffer activity has never been higher in the history of our company," says Gary Williams, a vice-president at Cleveland-based Management Recruiters International Inc.

A major factor in the rise: Restructuring has left management ranks razor thin. Plus, the job market in general is tight. Unemployment during the 1990-91 recession never got higher than 7.8%--vs. a 10.2% rate during the 1982-83 recession. The scarcity of good managers has driven up executive search fees, which run up to 33% of a first year's salary, plus headhunter's expenses. Add to that an average of $50,000 for relocation, and a counteroffer is often cheaper than recruiting a replacement.

Headhunters are fighting the trend. One strategy: point out to employees that they wouldn't have considered taking a new job at all unless they were unhappy in some way. Allen Salikof, president of Philadelphia-based Management Recruiters of Cherry Hill Inc., mails search candidates a list of 10 reasons not to consider a counteroffer. "We're getting in early and hitting hard," he says. "It kills our business to go all the way to the altar and not get married." Maybe so. But employees such as Brousell have found that looking before you leap isn't such a bad idea.By Gary McWilliams in Houston

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