Job Hunting: Don’t Accept the Counter Offer

During this time of employment uncertainty, many of us are making compromises. On the brighter side, many of us are also taking a stand.  This is most demonstrated by the demand for a higher salary.  For those who have not received pay increases for the last three years due to the economic downturn, yet received increased workload due to peer layoffs, the time of understanding has ended.   But be warned, negotiating a higher salary is a complex process riddled with pitfalls.

The down-side to winning the negotiation

Here’s an excerpt from an interesting article written by Alison Green of U.S. News and World Report:

“Using another job offer as a bargaining chip may be tempting, but too often, it ends badly. If you want a raise, then negotiate it on your own merits–or prepare to move on.

Here’s why:

1. Employers often make counter offers in a moment of panic. (“We can’t have Joe leave right now! We have that big conference next month.”) But after the initial relief passes, you may find your relationship with your employer–and your standing with the company–has fundamentally changed. You’re now the one who was looking to leave. You’re no longer part of the inner circle, and you might be at the top of the list if your company needs to make cutbacks in the future.

2. Even worse, your company might just want time to search for a replacement, figuring that it’s only a matter of time until you start looking around again. You might turn down your other offer and accept your employer’s counteroffer only to find yourself pushed out soon afterward. In fact, the rule of thumb among recruiters is that 70 to 80 percent of people who accept counteroffers either leave or are let go within a year.

3. There’s a reason you started job-searching in the first place. While more money is always a motivator, more often, there are also other factors that drove you to look: personality fit, dislike of your boss, boredom with the work, lack of recognition, insane deadlines–whatever it might have been. Those factors aren’t going change, and will likely start bothering you again as soon as the glow from your raise wears off.

4. Even if you get more money out of your company now, think about what it took to get it. You needed to have one foot out the door to get paid the wage you wanted, and there’s no reason to think that future salary increases will be any easier. The next time you want a raise, you might even be refused altogether on the grounds that “we just gave you that big increase when you were thinking about leaving.”

5. You may be told to take the other offer, even if you don’t really want it–and then you’ll have to follow through. Using another offer as a bluff is a really dangerous game.

6. Good luck getting that new employer to ever consider you again. If you go all the way through their hiring process only to accept a counteroffer from your current employer, then the former is going to be wary of considering you in the future. If it’s a company you’d like to work with, you might be shutting a door you’d rather keep open.”

Hal Reiter said, “I’ve learned in my 25 years of executive recruiting that accepting a counter-offer is usually career suicide. Watching your boss scramble to keep you may be a heady experience, but in exchange for that sweet moment, you’ll have squandered your honor, a sacrifice that will haunt you for many years. Even more troubling, you may never know exactly when or to what extent your reputation has been sullied.”

I agree with the experts

In my opinion, not only does the scramble to keep you put upper management in a vulnerable and desperate position, it also breeds resentment.  Sometimes even from co-workers who may see your actions as disloyal and self-serving.  I know, I know, obtaining a raise is supposed to be about receiving compensatory recognition of your accomplishments.  The problems is the associated negative perception.  There’s also the risk that you will lose the bet when leveraging the job offer.  If you choose to stay, be prepared to prove yourself all over again. And don’t forget that the same reason you decided to leave in the first place will likely remain.  If your decision to leave sparks a frank conversation about issues in the workplace that can be addressed, then by all means be the agent of change.  If you don’t see a willingness from your leadership or peers to solve the problem, be prepared to move on.  You will be forced to eventually.

I know a few people who accepted the counter offer but they are more unhappy now than before.  Primarily, it’s due to the fact they felt that leadership had to be threatened before acknowledging their contributions to the organization and providing fair compensation.  The situation leaves disappointment and regret on all sides.  Leadership often feels they were forced to give too much and the bargainer feels they were forced to settle.

Research shows that no matter what, most people feel that they are underpaid by at least 20% while at the same time studies also show that there is a cap to how much happiness is gained beyond a certain salary.  In essence, the buzz get’s harder and harder to achieve.  So, the crux of the matter is having a job that is rewarding, being part of an organization which respects you as an individual, and receiving recognition for your contributions.

No matter how complex our society becomes, we still have the basic human need to feel appreciated and respected.  That’s not likely to change, no matter the economic climate or employment trends.

Sources:

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Categories: Professional Development

Tags: , , ,

6 replies

  1. Thank you for your thoughts Sherry. My question is what if you’re in a job that you love, where you feel respected, and valued, and believe you are an essential part of the leadership team. Yet due to budgetary constraints, you have not seen compensation increases that are aligned with the greatly increased responsibility you’ve taken on? If you’re doing your job and doing it well, but need to earn more, How can you sell the idea of earning more, without feeling alienated or leaving a bad taste in the proverbial mouths of your boss?

    • Hi,

      Based on my experience, if you have a boss who is courageous enough to champion for you and has sufficient influence salary increases can be achieved. But again, you have to have a leader who is willing to put themselves on the line and fight for their people. Unfortunately, during these uncertain times, those types of leaders are more scarce than before. Everyone is seeking safety and many don’t want to rock the boat. I’ve experienced the same scenario at my job. There are departments where courageous leaders fought for their staff and achieved the requested increases while our department remained stagnate. Needless to say, my confidence in my leadership at the time (no longer with us) was significantly decreased.

      If you know of other Departments who have received increases, perhaps you can mention this to your boss and ask how the situation is different. The risky part is when you threaten to look for work elsehwere or even state that you have received a competing offer. If it gets to that point, then you should look for another job immediately and not even utter those words. It will increase the chances that you can leave in good standing and return to the organization at a higher salary some time in the future.

      Thanks for your comment. I hope this helps.

  2. Another compelling and informative article! Thank you.

    • Hi Tapeca,

      The article is very timely. Someone contacted me just this morning stating that he declined a job offer which would have put him in a similar position. It is a complicated situation because we want to be compensated for our value and feel dissapionted when our current employer won’t make the moves or sacrifices to do so.

      Many industry analysts say that the future of employer/employee relationships will be all about trust. That’s difficult to build when employees don’t feel respected. As a result, analysts expect that at any given time, in this employment climate as many as 35% of employees will actively pursue other employment which the economy improves. And another 40% may be actively dis-engaged from their work.

    • Thank you Sherry,

      I had just rejected an offer before reading your article so it confirmed my decision-making process. I felt empowered afterwards….

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