As the skill's shortage bites more and more companies are experiencing that dreaded hiring fail, the counter offer. After weeks or months of searching for a candidate with the right skill, all the interviews, the negotiations and the final acceptance you get that dreaded call a week later or worse, the day before the candidates starts. His or her previous employer has offered them a counter-offer and they are staying.
Counter-offers are a reality and must be dealt with. If you have any idea in your head that employees must be grateful for their jobs you need to change your perception immediately, the game has changed, when it comes to top quality highly skilled candidates, it's a job-seekers market. Highly skilled employees add so much to the bottom line of a company and are so difficult to replace that there is no longer a stigma attached to accepting a counter-offer. When hiring new talent you must assume they will be counter-offered and act accordingly.
First, understand the candidates motivation for a career change completely. It must make perfect and logical sense to you. If the reason is anything that could be fixed by having a simple chat with the boss, be wary because they will be having a heart to heart when they resign.
Second, an offer of employment is not a transaction to buy a new carpet, it's a personal measure of an individual's self-worth and it will be judged as such. Treat the offer of employment with respect, get it to them quickly, make sure it's accurate and make sure you are not low balling them. If you can only afford a lateral hire then be sure that has been explained in every step of the hiring process.
Third, make them your employee quickly. Once the candidate has accepted a role they go back to working at their previous employer who will sense something is up and turn on the charm offensive. You need to stay in contact with your new hire during this period, phone them with fun and simple little projects. Ask them to come in and help set up their desk, invite them to functions, in short, your new hire is with his or her ex, you need to be sure they don't forget about you and all the reasons they want to come work for you.