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Tuesday, May 19, 2009

Counter Offers

I work in California and have recently been offered a similar position with a new company. I turned in my resignation letter today and my boss asked me what it would take to make me stay. I told him that if they increase my salary to match the new offer I would stay.

After he talks with his boss and HR, he tells me that they will match the offer but they want to see a hard copy first.

I'm wondering if this is violating my privacy rights to salary information. I'm also hesitant to provide a copy of the new offer because I do not want to jeopardize this new position if the negotiations fall-out. Perhaps I could mark out the name and contact information of the new company....


I think you should thank your boss for his confidence in you, and take the new job and leave.

Why?

Because you went looking for a new job for a reason and it's highly doubtful that that reason was money. Oh sure, we all want more money. Me too. But, money is rarely the reason why people start looking for a new job.

I hear screaming from the crowd. The crowd is saying, "But I just went out looking for more money! I didn't have any other reason for looking for a new job. I love my job! I do! I just want more money.!"

Sure, fine. So, why did your boss not offer you more money before you presented him with an offer from a new company? Hmmm?

I believe it was because the company you worked for did not value you any higher.

Sure, your boss would love to give you more money but company policies prevent it.

Stupid company. They need to be watching out for their best people and meeting their needs. And if you truly loved your boss you wouldn't have been out looking for a new job in the first place.

There is another reason why you went out job shopping. Think about that. Most people who accept counter offers leave within a year anyway.

If you decide you want to continue on with the negotiations, go ahead and show them the offer letter. If you are concerned that doing this will jeopardize your job offer, that means you don't trust your boss or the HR person. Why on earth are you staying with a company where you don't trust your boss not to actively screw you over?

Think about that for a moment.

Take the new job and good luck.

29 comments:

The HR Store said...

I had answered the same question a couple of months back on my blog (http://tinyurl.com/odjgbl). I had suggested the same outcome to the person who asked me.

Save yourself the trouble. Say thanks to your current company's counter-offer & go join the new company. All the best!

peer said...

I'll make a third. Counter offers are really flattering and tempting, but more money is only a short term fix.

Congratulations on your offer and good luck in your new position.

Anonymous said...

Spot on, EHRL. However, while your response gets to the heart of the matter and deftly instructs the writer what s/he should ultimately do, you fail to directly address the question.

So, dear writer…are you serious…privacy rights? Why would your current employer just take your word as to how much Company X has offered you? Whether you are willing to or not, there are at least some unscrupulous people who pull this type of thing without actually having another offer, just to squeeze more out of their current employer. A dangerous game, to be sure. It seems perfectly reasonable that if you expect your current employer to match the offer, you need to prove it. What did you expect? When you state your intentions to leave, trust goes out the window and is replaced by…wait for it…practicality. If you are actually interested in staying, you need to cough up the letter. But at this point, back to what EHRL said, it might be time to leave. Best of luck!

Ask a Manager said...

Here's what many managers think when a good employee resigns: "Oh, crap. This is a horrible time for her to leave. We're going to be screwed. It'll take us forever to find the right replacement. Crap! Let me see if I can do anything to keep her."

This is what they think after you accept their counter-offer: "Okay, that's taken care of. But... wow, I have a bad taste in my mouth now. Apparently she's been job searching for months without ever saying anything to us about her dissatisfaction here, which means that this could happen again and, again, I won't know. And it was just about money, since money got her to stay? Hmmm, I feel differently about this employee now."

That feeling lingers for a long time.

Take the new job.

Chuck said...

Don't forget about the possibility that the company may be extending a counteroffer just to keep you on-board until your replacement can be trained. At that time, you'll be terminated and the other company will have hired someone else.

And, by asking for a copy of the offer in writing, it seems to me they doubt your integrity. Do you want to continue working for a company that doesn't trust you? Wouldn't you prefer working for someone who takes you at your word (hopefully your new employer)?

I vote to take the new offer and go for it!

Kerry said...

So, they don't trust you (you can tell because they want a copy of your offer letter).

And you don't trust them (because you're writing to a blogger about "privacy rights").

Why on earth would it be a good idea to continue this relationship? Because it's going to get worse, not better. This whole episode is going to leave both of you feeling disgruntled.

And then, later, when that comes to a head, the other offer will be gone...because they're going to be pissed when they learn that you've used their offer letter to negotiate a higher salary at your current job. You've wasted their time (and I see that that was not your intention, but that will be their perception).

This is a no-brainer. Walk away and take the new job.

George Guajardo said...

Yeah, this one is pretty clear. Even as they try to keep you they are pushing you away. You can't blame them for not trusting you, really. But you should not be judged harshly for thinking their "proof-seeking" is a dumb move.

Think of this from the sales perspective. When your client tells you a competitor has offered the same product for a lower price, do you ask them for proof? Not if you want the sale!

Charles said...

It's already been said; but

LEAVE! LEAVE! LEAVE!

There are several reason's (already given) such as: you were looking already, your current employer will view you differently now, they will be preparing for you to leave, etc.

But most importantly, as you have already noted, they wanted to see the offer in writing.It might be one thing if they have just "neglected" salaries and suddenly seemed to realize that they need to catch up to the market. But with their request to see the offer in writing I doubt it.

It is possible that they don't believe you and view you (as anonymous said above) as "unscrupulous," just playing a game to get more money out of them. In my opinion that makes them unscrupulous to think that. And if they are, your hesitation in showing them the hard copy is valid. Who's to say that they wouldn't try to contact that new company and say that you were only interviewing with them to get more money out of your old employer or something else negative? That would screw you out of any options to leave and cause you to stay at your old salary until they replaced you.

Under no circumstance would I give a current employer correspondance from a prospective employer. Period.BTW, would a recruiter comply if one, when first hired, had asked for proof "in writing" when they offered a salary that was "competitive market rates"? What would any hiring manager think of such a request? Rhetorical question? Yea, I thought so.

Forget the "privacy rights" issue. Be Professional and do as EHRL said: ". . . you should thank your boss for his confidence in you, and take the new job and leave."

Just Another HR Lady said...

I totally agree, I am firmly against counter-offers. The time to try and resolve any issues would have been before you were job hunting. Try not to let money sway you, you are clearly leaving for other reasons. The one-year thing has always proved true in my experience, that employee will still be leaving in the very near future, counter offer or not.

Anonymous said...

oh boy.

i'm one of those evil hr folks that has asked to see the offer letter when making a counter offer. i do tell them that it's ok to block out the prospective employer info. before you freak out, please hear me out.

we counsel managers that counters don't work, etc. but they are often adamant that it must be done to save the business & keep clients happy. luckily, the economy has helped us change our practice from one that offers counters by default, to one that doesn't offer them at all (or in very, very rare circumstances).

i understand the principle of asking for more so you get what you really want. i attribute that mostly to our industry. before the economic downturn, there were more jobs available than there are people to fill them. despite the recession, we are still hiring. we have hired over 40 people in Q1 alone.

i have been asked by executive management and our parent company to verify the prospective offer prior to requesting approval for a counter. it puts me in a precarious position. this is why i ask to view the offer letter. i never ask for a copy. surprisingly enough, i haven't had any push back from employees when asking to briefly see the offer.

here's the kicker. it's happened three times in the past 2 years that the person inflated their offer so the counter would be larger. once i took a look at the offer letter and saw the difference, the person usually fessed up (embarassingly) to inflating the offer so the counter would be more. in some cases, we have met the offer or have paid more.

even before the recession, our parent company was not approving our bi-annual raise pool. one of the only ways we were able to reward employees with increases was with a counter offer. it's a ridiculous strategy but we're stuck with it unfortunately. as a result, we have implemented other ways for managers to reward employees in the absence of raises.

it's not an issue of trust for me. it's more of an issue of being able to truthfully tell my management and parent company that i verified the offer prior to the counter being made. we've tried to get them to understand the repercussions of doing this, but sometimes you just don't win.
sigh.

Lorraine said...

It's never a good idea to either counter-offer or to accept one. I agree that if a person went looking elsewhere, they went for a reason other than money. Chances are, within six months, the person that accepted the counter-offer will be gone, as the reason behind seeking another job still remains.

Also, asking for proof of an offer is a reasonable request. A manager needs to jump through many hurdles to get a raise approved for someone these days.

Livvy said...

When I get a resignation letter, that's it. I may be really sorry about losing the person, but I know the loss happened a while ago - when they decided to start looking. If the employee starts fishing for a counter, I feel relieved....I've gone from losing a valued employee to getting rid of someone who is trying to blackmail me.

In my own case, I made darn sure my boss knew I was very unhappy about compensation, that I didn't want to go looking, but if the matter wasn't corrected (I was well below benchmarks for the position) I would go looking. Thankfully, I never had to. He gave me a 25% raise to catch me up, and we were both happy.

The lesson is - your employer can't fix a problem they don't know about. If you haven't let them know you're unhappy before looking, the relationship is broken.

It would be equivalent to asking for a divorce before every saying you were unhappy. Even if you and your spouse worked it out, the trust could never be completely repaired.

Ask a Manager said...

Livvy: Brilliant comparison!

Anonymous: When you discovered that some of them had inflated their offers in order to get a higher offer, I'm assuming/hoping you told them to enjoy the new job, right?

Anonymous said...

@Ask a Manager - no, actually. i advised management in all 3 cases of the inflated salary and they still wanted to counter. we were in a real war for talent and were so afraid of losing clients, that they just weren't listening to our counsel. it's frustrating. i can honestly say that there is one good thing about this recession - it has brought some normalcy and realism to management decisions.

clobbered said...

I actually don't understand why the counter offer in relevant, either in the original question or in the Anynoymous HR person's answer.

The question is "What would it take to keep you" (and granted, there is a subtext of "until we can be better prepared for your departure").

The answer should be in the form of "$X,000". Whether this is equal or exceeds any other opportunities the employee has on the table is surely besides the point. It is the price at which the employee would agree to stay. In fact, if they have another offer it is probably because they are unhappy with their situation (as many have pointed out) so I wouldn't be surprised at all if the person quoted something above their counteroffer.

Anonymous said...

Rather than play games and fish for a counter offer, why not ask for a raise AFTER you have the other offer? If your boss gives you a sob story and says his hands are tied, resign and stand by your decision.

Although, I agree with everyone else that money is almost never the reason for leaving. If you accept the counter, you'll be looking again in 6 months.

Christian said...

The counter offer is totally irrelevant. If the old company really values the employee they will pay a satisfactory salary. To ask to see the offer before countering it just says that they don’t trust the employee and also those they are only willing to pay a satisfactory salary if they risk losing their employees. So when next years salary review comes, guess who does not get anything (unless actually securing another job again).

A company that only are willing to pay competitive salaries after seeing in writing what other companies pays should really think about their salary structure and what type of employees they want.

Ask a Manager said...

I agree with Clobbered that the relevant question should be, "What would it take to keep you?" ... but if the employee is framing it in terms of "I got an offer and it's for $xx, so I have to take it unless you can match it," then what that offer is does become relevant. The employee could sidestep that whole thing by not framing it in a way where the matching question even comes up and instead could frame the discussion on "I'd stay if ___."

However, the time to have that discussion should still be before job hunting. Once they have another offer, all the comments from everyone above come into play, and I think it's better for both sides if the employee takes the new job they sought.

Dan McCarthy said...

I’m leaning on the side of not taking or offering counters, but I don’t think it’s such a slam dunk. (although in this specific case it is)
What about the concept of a “save”? That is, when a superstar is about to leave and a manager convinces her not to and finds a way to retain her, and she lives happily ever after? I’ve heard just as many of those stories as the ones described here (bitter, resentful, regrets). In fact, I have one of those employees working for me now, going on two years now. We gave her a different job, and the ability to work from home. No regrets on either side and a win-win for all.

Nitesh said...

Well in the current case there are four entities Employee E, Manager M, HR person H and top management TM.

It appears that E wants a hike which M is ok with but requires a consent from H.
Now, H needs to justify the salary to TM before it approves of it and requires the counter offer to prove it's point.


Firstly, there is one mistake on HR's part that it is cauht unaware of the industry standards for compensation.
Second, it relies on another comapny to justify the true potential of the employee or atleast to prove it to TM.

The E on it's side had 2 possibilities
1) Without any job offer raise the grievances with M.
See if they can be resolved else go to point 2
2) Seek for a job offer and then raise concerns.

Now how many managers would themselves personally do a 1 rather than a 2?

Would the TM actually value the feedback of their own Managers to give drastic raise to employees or would they trust the intelligence of another company?

Why does H not have a mkt research in place?

she said: said...

I think you should thank your lucky stars you have at least one job. You have no bargaining power. Period.

Truth be told, they could probably get someone for much cheaper than you now.

This is an employers market. Take the new job, and pray the company does good and doesn't lay you off.

El Comodoro said...

Agree with the pretty much unanimous advice here. Some nuances/other points to consider, tho:

Always act from a position of strength (perceived or otherwise). I disagree completely with She Said, "thanking your lucky stars" and all of that will keep you at the same job you hate for a long, long time.

Saying you'd be amenable to a counteroffer screams, "I really don't mean what I'm doing. I'm not decisive. You can change my not so made up mind."

As others have said, going out and nabbing an offer somewhere else evidences the current relationship is busted or at the very least, it's not something you want to endure anymore.

Wheels have already started moving on both sides of the relationship. If you would stay, things will be different from here on... probably in a bad way. And you will be out of there in a year or less, don't kid yourself.

Shake hands, and amscray.

Infamous HR Guy said...

Amen!!! Get out! Get out now!

Oddly, I had a friend just ask me this on Monday. I asked, "Why were you looking for a new job?"

He answered, "I am tired of working 60-70 hours a week because they let go of 4 of my 7 staff."

I said, "There's your answer, no amount of money can change their expectations of your 60-70 hour work weeks."

His company undervalued the experience they had. No he's leaving in two weeks. 9 years of knowledge gone because they over worked their greatest asset...Their employees.

Anonymous said...

Totally agree with most of what is said here. Accepting a counter offer is bad news.

Also, There's no reason for the company to require proof in writing. A company will never pay above market rate for talent. If they think the employee is exagerating then they should call their bluff, say goodbye and hire someone at market rate.

If anyone's truly in a situation where it's only about money, then I would encourage an open discussion (about getting paid market rate) with the boss well before job seeking. If they think you're valuable you'll get some type of salary increase without even having to look for a job at all. If they say no, then at least you know what they think of you. It worked for me - and I got a bigger raise then I expected, and eventually a promotion 12 months later.

Mark Bregman said...

I agree. See my take on this, "The Dead Meat Theory" at: http://www.bobsearch.com/rfv-9.aspx

Terry said...

Yes, it's all about trust, isn't it? Sadly, this is just a commentary on how the employment relationship is now more about legalese and mutual suspicion than trust.

The fantastic Amusis business blog has a typically witty post on this very topic (called 'Are all employees spies and thieves?)at:

http://amusis.com/?p=403

Anonymous said...

I'm in a similar but slightly different situation.

A year a go I was on secondment and my manager from my original office decided to leave the company and highlighted there would be a position for me with a substantial pay rise if I choose to go with him. I went for the interview and got offered the job. About a 50% pay increase on my basic.

At the same time I was being offered a number of promotions at my current company. There was one job that stood out as a good career move. I indicated I was thinking of leaving the company to take the pay increase. The manager was keen to get a counter offer but HR refused even though I was changing jobs, the company has a policy to only give pay reviews at year end.

I was verbally assured my salary would be brought inline with my expectations at year end. Something I now wished I had asked for in writing.

Unfortunately the markets took a downturn and my salary was not increased as promised (company wide pay freeze) but the salary expectations where made up for by a bigger bonus. This helped slightly but I still felt let down and that I could no longer trust my company / managers. There has been no mention of pay reviews this year.

A year later from the first offer and I am now in the same position again. My old manager is offering me the same job to leave for now a 60% pay increase.

My concerns are that I think the job is a slight step backwards and the work might not be that interesting. I am also concerned about how I will be viewed in the new company as a lot of people will know that I have a previous working relationship with the manager (who would then be my new manager’s boss).

I would definitely want to stay at the current company if my pay was even bought inline with market rates and I feel I am only leaving for money, possible to a job I won't enjoy as much.

Does it ever make sense to leave just for money? A lot of people have told me I'm crazy for even needing to consider this given it is a 60% increase.

A.

Eric Raynard said...

Anonymous:

You're not in a different situation. You're in the same situation a year later. Go to the new company and stop worrying.

The current company said the magic words and promised just enough to keep you. They also have not lived up to some of their commitments.

Stop worrying and move along. Enjoy your new situation in a non - ethically challenged environment.

Michal said...

I concur with the comments that a accepting a counter offer is a bad idea. Besides the fact that the management in your current company did not see fit to offer the promotion/salary increase does not bode well for your next career step in that company.

I have also found that receiving more money or a new position after you've threatened to resign can cause ripples among your fellow co-workers and even some management that you may have to deal with going forward. There can be a bit of resentment because people may beleive that you extorted the increases out of the company. Not always a fair assessment but it happens nonetheless.

I would take the new job and work diligently to prove to that company that you are worth premium they are paying you.