Tight competition for senior-level executives is behind the trend, recruiting experts say.

Tuesday, February 06, 2007 -

Counteroffers like the one that kept Tom Mauk in his post appear to be on the rise around the county as companies try to retain and attract senior-level talent.

"We're seeing counteroffers now more than ever," said Debbie Neal, owner of Compass Search Group, an executive search firm in Irvine that specializes in accounting and finance.

One reason for the uptick is the tight labor market, Neal said. She usually solicits clients, but they're calling her office with orders.

Chief financial officers are an especially hot commodity as companies compete for talent that can keep them in compliance with Sarbanes-Oxley. The post-Enron regulations impose criminal and civil penalties for securities violations.

Mauk's case is somewhat typical: An executive gets wooed by a competitor, takes the job and then gets a better deal from his original employer. Offered a raise and chance to reconsider, the candidate often decides it's better for his family to stay put.

But there's an art to making and accepting a counteroffer, experts say.

"The threat of a counter is not just money," Neal said. "It's also about the challenge to grow and continue to learn. The package is so important, and health care is a big deal. Beyond the base and bonus, it's how it affects the pocketbook of the individual."

Employees should be careful not to burn bridges within the industry, and they need to understand what's driving them to make a change.

"We ask candidates a lot of questions," Neal said. "What are you giving up? What's different than what you're getting where you're at? And have you been proactive in communicating your needs to the current employer? That will determine how big a shock it might be when a person does give their notice."

Steve Brown, a director at Bridgegate LLC in Irvine, recruits heavily in the technology industries. He usually advises against countering.

"If it comes to bidding wars, let them go," Brown said. "You will be setting yourself up to be held hostage by the rest of your company as word gets out that someone was given a counteroffer and accepted.

"Unfortunately, even if the reason for this situation is that the company has arrogantly undervalued this employee and would like to make retribution, the same situation usually results in other employees threatening to leave."

In the past, employers might have looked at "job hoppers" with more caution, Brown said. Today, a series of jobs in a short period of time can't be considered the employee's fault.

"Acquisitions and mergers have displaced many loyal team members," Brown said. "If a company wants loyalty, they have to be loyal first. Think Japanese. They are loyal to their people, and their people will never leave them."

Brown also suggests employers look at a person's record before 1999, the height of the mergers, to judge the loyalty factor.

If there is any concern that a counteroffer will set someone up to become an underperformer, don't propose such a deal.

"Let your competitor have them," Brown said. "If this person is a star performer, they will likely stay their course and continue their stellar performance."

Contact the writer: 949-653-6262 or mhimmelberg@ocregister.com