This post was a collaborative effort. My manager and I wanted to explain the ins and outs of counteroffers.
Leaving your current firm? Beware of the counteroffer!
You scored a new job and now it’s time for the dreaded formal resignation. Shaking in your boots, you head to your manager’s desk to hand over your resignation letter. You step in and say your piece, handing your manager the letter while your heart pounds in your chest. The seconds feel like hours as he (or she) sits there glancing over your letter, shaking their head, aghast at the thought of you leaving. Suddenly, now that you are leaving, he tells you that you are a vital part of the organization, that the team needs you, the company will increase your pay and the sun will only shine again if you stay. Before you agree, ask yourself why your firm has such a new found admiration for you.
Many times it is not about the actual person but more about missed productivity, the possibility of losing business knowledge, and the pure economics of having to hire someone new.
Before you take the counteroffer – keep these 3 keep points in mind.
- Remember why you are unhappy! We rarely see a person leave a job just because of money. Sure, it can play a pretty big part in their decision, but when speaking with candidates, other issues arise that the candidate may not have even realized was bothering them. Recruiters are part therapists . Many times I have seen candidates guilted into remaining at a firm by bosses that will not hit their milestones if one of their team members leaves in the middle of a project. The manager, or many times the manager’s manager, will sequester you into a conference room and browbeat you into remaining at a firm because they will tell you that you must stay, the business will fail without you, and that you are putting them into senior managements cross hairs if you choose to leave the firm before the project(s) is/are completed. All of this may be true. But if it is, it underlines other, far more serious problems. Your management has not managed you or the project correctly if one team member leaving will doom the project or operation. Succession planning is a must in today’s business environment. These management issues are many times the reason you looked to leave in the first place. Poor management at the top requires more work, more stress, and, many times, less pay for the employees at the bottom. Even if you take the counteroffer and get paid more handsomely, the same bad decisions and managers that drove you to look elsewhere will still be present. Nothing will change except you will have compromised yourself, placing you first in line if there are future cut backs. You don’t know if they will go back to putting their blinders on once you accept the counteroffer?
- Why does it take a formal resignation for them to see your true value? Let’s look at the economics of you deciding to leave the firm. Let’s say you are underpaid. For our example, let’s say you earn 100k but are worth in the market 130k. You get an offer for 125k which would be a 25% pay raise, a fair and normal bump up when one changes jobs. If your firm were to replace you, they would have to pay 130k base, a possible recruitment fee of 32k (25% of 130k), and possibly have to lose productivity for a month or longer. They may have to pay a consultant to take up the slack until they find a replacement. They will or your soon to be ex colleagues definitely have to work more themselves until they replace you. They will save 37k with no loss of productivity if they simply match the offer you received. It is simple math that drives the decision. It is not about you or your best interests, but what is best for them.
- Don’t believe it is personal. 9 times out of 10, if I were to call the manager that just made the counteroffer and speak to them about looking at new opportunities, they will listen. They know that if one person is looking to leave, others are as well. They know they are going to have a much harder time keeping the group together and that it will become difficult to keep giving counteroffers. They know that they will have to spend more time recruiting and productivity will go down. They will have a harder time staying in their budget. They are usually experienced enough to have seen similar situations and know that it will take more than what management is presently willing to do, to right the ship.
There are many other reasons why you should think carefully before accepting a counteroffer. I am not saying that we know it all, but in our experience, counteroffers rarely end well. Unfortunately, we usually hear back from those same candidates that turned down a new offer mere months later voicing their regret for staying with their firm. Think long and hard about your decision for it will affect you for long after you make your decision.
You should always run your career as a business. The gratification of knowing that a firm appreciates you and respects you is always important. But if you have to say I’m walking out the door to make that happen, are you really being respected? Does the firm really appreciate you? If this was a personal relationship, and you had started a new relationship before you ended the old one, does it EVER work to go back to the old one? There are always going to be trust issues. You will always wonder what if? Counteroffers, in my 17 years of recruiting, work out about 15% of the time. 85% of the time the person is NOT working at the company that offered the counteroffer in one years’ time. If you are unsure, talk to the firm that offered the job, if they want you, they will answer any questions that you have to make you feel more secure in your decision to move forward. And that is what you always want to do in your career… move forward.
~ Ed Guy and Evelyn Amaro
This post was originally published on NationStaff.com