Perman Technical Search Group

Counteroffers

Counteroffers: The Grass May Not Be Greener
By Gaston F. Ceron

Take the money and run, or take the money and stay?
It’s a choice you may well face at one point in your career: Whether to jump to another company that’s trying to seduce you with a fatter paycheck and better perks, or use the job offer as leverage to push your current boss into producing a package that would make it worthwhile to stay.
For most employees, this sounds like a dream scenario, allowing them for once to turn the tables on an employer and come out ahead. But it’s a path fraught with risks, and employees looking to play the make-me-an-offer-I-can’t-refuse game must tread carefully.
“It can be done,” but “it is sort of a dicey and delicate thing to deal with,” says Bill Coleman, senior vice president of compensation at Salary.com, a Needham, Mass.,-based online provider of pay information. “It’s the equivalent of holding a gun to your employer’s head,” adds Steve Hall, director of professional recruiting at FGP International, a staffing and executive-search agency in Greenville, S.C.

The Worst Case

Recruiters caution against doing it without thinking about consequences first: Don’t say you’re thinking about leaving unless you mean it, because your manager may call your bluff. “Sometimes when you go to your boss and tell them you got a better offer, they wish you luck,” says Mr. Coleman.
If you’re prepared to proceed, job experts recommend that you be as specific as possible with your current boss on what it would take you to stay. Robin Ryan, a career coach based in Newcastle, Wash., says it’s important to do this because in these types of negotiations time is often an issue — the outside company that is trying to lure you wants to hear back soon, and your current boss will need at least some time to see if the offer can be matched. “There’s usually a time crunch,” says Ms. Ryan, so “phrase it in a way that states what you want” — for example, saying “for me to stay here I need a $12,000 raise or that title that I’ve been wanting.”
For employees who want to stay with their current employer, provided that a competing offer can be matched or even topped, career experts recommend giving their supervisors ammunition they can use to help sell an improved compensation package to their higher-ups. Ms. Ryan recommends that employees spell out the value they add to their organization and why it would make sense to keep them, even if it takes a raise or promotion. Tell your manager, “These are the three things I’m going to work on the next six months that are going to add to the bottom line,” she says.
Ms. Ryan recalls a woman working as an office manager for a hospital clinic who had an outside offer and wanted to see if her boss would match it. “She told me, ‘I really would like to stay,’ ” Ms. Ryan says. “I told her, ‘When you talk to the person you must tell them why you’re worth it.’ ” The woman took Ms. Ryan’s advice, writing a letter that highlighted her contributions to the company, and she ended up keeping her job after her employer countered by offering a salary increase.

Getting the Boss on Board

It’s important to justify why you’re seeking a counteroffer — and get your boss on board with that rationale — because even if one is made and you stay, you could still be viewed with suspicion. Your managers and fellow employees may question your loyalty to the company.
“Companies don’t like to be fired, they like to do the firing,” says Mr. Hall, FGP’s recruiting director. “Anytime you show up late in the morning, anytime you’re not viewed as a team player, there’s tremendous resentment by the boss,” Mr. Hall says. Perks you negotiate as part of the counteroffer could make co-workers jealous. “If you’re now getting Friday afternoons off, you’re going to be resented by your teammates,” he says.
If a counteroffer does surface, employees should think before taking it. It’s natural to view salary as the ultimate reason for employment, but there are many reasons aside from pay that make employees think about leaving a company. So even if your current boss matches that rival offer, it’s wise to think about the other, less tangible qualities that make one employer more attractive than the other.
Kimberly Walker, division director at the Chicago office of Creative Group, a staffing service owned by Robert Half International Inc., says employees should review all the reasons that originally made them consider leaving before accepting a counteroffer. “It’s not always compensation,” she says. “Is that really the reason why you’re unhappy? It might be that there’s not more of a challenge from a work perspective. Counteroffers don’t always address all of the issues that prompted a person to seek other employment in the first place.”

Mixed Message

Sometimes a counteroffer sends a different message than the one intended. Mr. Coleman, at Salary.com, recalls an incident that occurred several years ago when he was working at another company. “I had had a performance review and was told I was doing very well, everything positive, ‘you’re a keeper,’ that kind of thing. I questioned my salary, and I was told budgets were tight. Completely coincidentally, I got a call from a recruiter with an opportunity. I went on the interview and got an offer that was effectively a 35% salary increase without negotiating,” Mr. Coleman says. “I went back and gave my notice. Within half an hour the salary was matched.” Mr. Coleman was taken aback at his employer’s abrupt about-face just weeks after being told that tight budgets precluded a higher salary. “I questioned the previous conversations,” says Mr. Coleman. “I felt like I was being cheated and lied to.” So he left.
Career experts recommend that employees put their managers on notice that they’re unhappy with their jobs before looking for outside employment and seeking a counteroffer. Mr. Hall recommends sitting down with your boss and telling him or her that you feel undervalued, explain why and ask if there’s anything that can be done.

Don’t Burn Bridges

It’s also important not to burn bridges. If you take a counteroffer from your current employer, the other company that was recruiting you may feel it was used as a negotiating pawn. Reputations can be lost in these types of situations if officials of the other company feel you weren’t honest with them, recruiters warn.
When negotiating a counteroffer, many employees will try to milk the situation for all it’s worth. But that, too, can be a mistake. The tables could turn again, and someday, if the job market cools, you could find yourself at your boss’s mercy — and he or she may remember you played hardball earlier.
“It’s a tough balance to achieve,” says Mr. Coleman, since people want to be paid what they’re worth. But he cautions against asking for so much that you price yourself out of the market. If your boss agrees today, your high pay may be held against you when raises or bonuses are parceled out in the future — or even when it’s decided who will lose their jobs in a round of layoffs. Over time, says Mr. Coleman, “companies generally tend to take outliers and put them back in line.”

Gary Perman is President of Perman Technical Search Group, a national search firm that specializes in recruiting Executives to Engineers in the technology industry since 1996.
If you have questions about this article, feel free to contact him at gary@permantech.com

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