All stoked up about that job offer? The details in hand, now is decision time. Go down the list – job scope and title, your new colleagues, company stability and prestige, corner office, compensation and benefits, check that list and yep everything is in place so time to accept that offer. Now the hard part, telling your current boss who you know will be crest fallen because after all they love you in your current job but just aren’t paying you enough money. If only they had told you how valuable you are then maybe you would not have looked elsewhere for another opportunity. But this might work out once you tell them you are leaving; maybe they will find the money and ask you to stay. Renewed confidence, you break the news to your boss that another company wants you and……what’s this, they make you a counteroffer to keep you? More money, better title, and you get to stay put, how could this be anything but a bonanza? Score!
Hang on my friend, accepting a counter offer from your current employer is often a bad bargain. There is more to it than your immediate perspective, and there are consequences that may not be immediately apparent in this situation. Here’s what you are gambling:
o Credibility: If you take a counter offer you are damaging your credibility with both companies. You just went through the hiring process with a company that brought you to the point of offer. They invested time, resources, and a hiring manager at least has stepped up internally within that company to be your advocate to bring you to the point of offer. By accepting a counteroffer from your current employer, you are essentially saying that you were using them as leverage to get a better deal out of your boss. That employer will be frustrated that you used them solely as leverage and feel tricked by your apparent previous interest in their company. The double whammy is that you have now also planted the seeds of doubt with your current employer by revealing that you are looking elsewhere for career opportunities. They will doubt your loyalty and, even if you accept their counteroffer, will doubt your longevity. In fact, a lot of employers will start looking for your replacement immediately even if you stay, assuming that you won’t stick around much longer. You may as well light a match to your believability with either of these companies because you just burned two bridges simultaneously. If you did this all through a search firm, then you hit the trifecta because you just damaged your credibility with the recruiter. Good luck working with any of these people again.
o Money does not buy happiness: We are not talking the lottery jackpot here. Maybe your current compensation is contributing to your lack of job satisfaction, but compensation alone is not going to solve your motivational problem. Job hunting is not a sport, so be honest with yourself about why you were looking in the first instance. There are all kinds of perfectly legitimate reasons why you are pursuing a job change. Be honest with yourself about what those are, and what will ignite and excite you in your next role. The money in a counteroffer is never enough to offset your pursuit of different/better/more elsewhere. There are trade offs in every move and you should evaluate them carefully, but be circumspect about replacing money for other values.
o It is never what you think: Chances are that counteroffer comes with strings attached. It’s not as if the company just found money in the bank they forgot to pay you. It could mean greater scope of responsibility, more travel or investment of time on your part, or higher level of performance expectations, all of which may come at a personal sacrifice on your part. Even if it is more money for the exact same job you have been performing then you best check the fine print for claw-back provisions or stricter non-compete provisions. No counteroffer is free.
o Ego: Are you trying to get your employer to say you are indispensible by manipulating them to come up with a counteroffer? In this economy? What are you thinking? The best way to get your employer to demonstrate their appreciation for your contribution is through excellence in performance. Period. If you think you are not getting the credit you deserve, have THAT conversation with your manager, and think carefully about how you market yourself and the accomplishments of your team internally.
o Apples to oranges: When comparing an offer and a counteroffer, there can be several components which factor into the equation of how the comp packages end up looking different. Lawyers for example are compensated very differently in a corporate environment than they are in a law firm. Public companies structure their pay differently than privately held companies or non-profit entities. Along with those differences are also subtle differences in the style of the role. Add that up and of course the compensation looks different. By the same analysis, the exact same job in a substantially similar sized company is not going to have a huge disparity in compensation. You should not expect to substantially improve your compensation by taking the exact same job you have now by moving to a competitor.
Other articles describing counteroffer effectiveness mention studies which suggest that the majority of people who accept a counteroffer leave for another job within a year. I wonder how many of those people burned bridges along the way and found that what they bargained for was a bust and not the bonanza they expected?
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The postings on this site reflect my own views and don't neccessarily represent the positions, strategies, or opinions of Major, Lindsey & Africa.