Psych-ops: Banks get aggressive with counteroffers
Bonuses are being awarded at American banks and in a few weeks' time those bonuses will be in bank accounts and their recipients will be free to find new jobs. But before you even think about resigning, take a deep breath. - The process is unlikely to be at all easy.
"The bid-back scenario was really aggressive in 2021 and I can't see that changing in 2022," says the head of one banking search boutique in London. "This is particularly going to be the case in high growth areas like technology and healthcare investment banking. There's just a huge amount of activity there, and banks can't afford for anyone to leave."
It's not just rainmaking investment banker types who are being beasted when they try to resign, though. Writing on this site, one strat at a European bank in London said his manager ignored his resignation for several days and then shouted for 10 minutes when he refused to accept the counteroffer. He was subsequently forced to work his entire retention period.
Headhunters with candidates who are moving in the next few months say they're spending a lot of time coaching them on how to resist banks' attempts to bid them back. WhatsApp messages during the counteroffer process are common. "You need to be kept abreast of the conversations they're having," says one.
It's also becoming commonplace for headhunters to wine and dine high value candidates before they hand in their resignations as a method of steeling their resolve. "Banks have become very aggressive, so it's good to warn them what's about to happen," says one headhunter.
What is about to happen? Aside from shouting or being ignored, the usual thing is to wheel out all kinds of very senior people to assure the candidate of their importance, and then to offer a huge pay rise - sometimes as high as 50%. "Candidates need to understand that banks are only doing this because they know it will take a long time to find a replacement and they don't want to lose the revenue stream," says the headhunter. "You will never see these people again and once they know you've tried to resign, your career there is probably over."
The ideal is to ensure that the offer from the new bank is sufficiently that the counteroffer appears inconsequential. "The move should never be about the money, but it always is," says the head of the search firm. "You tell the candidate that they're moving for the opportunity and the better platform, but ultimately it comes down to the amount of money on the table for them if they stay."
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