Have you ever been approached by your current company with a counteroffer to
keep you from jumping ship? Or, has a potential employer ever offered you
less than what you were expecting, then upped the ante when you told them you
deserved more? What did you do? Take the money and be glad to get it?
Wonder why you had to "leave" to generate some financial appreciation?
Refuse the job offer because anyone who doesn't offer what you're worth
initially is probably a long-term Scrooge? Assume your potential employer is
simply naive about compensation issues, has your best interests in mind and
genuinely desires to make you a part of her team?
Counteroffers are mixed blessings. While the executive who really enjoys
bargaining might be wary of anyone who automatically gives him what he wants,
the "call- them-as-I-see-them" professional is likely to be offended by even a
hint of gamesmanship.
How you decide to deal with a counteroffer will have a lot to do with your
perception of the individual suggesting it, your personality, the history of
your relationship and the overall package that comes along with the offer.
Let's take a look at two typical counteroffer scenarios and consider the
questions and thought process each one poses. While neither Bill nor Jan are
real people, their situations will sound very familiar to you.
The We-Want-to-Keep-You Counteroffer
Bill Johnson has been a manager with a successful retail chain for about six
years. He's a savvy, hard worker who can always count on a good review.
While he knows he's made an important contribution to his company, he thinks
his boss has taken him for granted and is laissez faire about promoting his
career. Consequently, Bill has been looking for other employment where he
can tackle new challenges and have the active support of his management team.
Several months into his job search, he is offered a new position which
includes 10% raise over his current earnings and promised advancement in no
more than two years. When Bill gives his two-week notice, he is surprised at
the impact it makes on his manager. Two days later his boss offers him an
immediate 15% raise and a spot on a company-wide task force that will
dramatically increase his visibility and showcase his ideas.
Questions Bill Should Be Asking Himself
If I'm so valuable, why has no one acknowledged my contribution before?
Is this counteroffer a harbinger of things to come or just a stop-gap
measure to keep me around for a while?
Which offer is the best overall match with what I want in my career?
Should I take the new opportunity or stay where I have established
relationships and a good track record?
Is there anything I should do differently to solidify and promote my
position either in my current job or the new one?
Bill's Thought Process
It seems that Bill has jolted his management into recognizing how tough things
would be if he left the company. Apparently he has a lot more leverage than
he thought. The question is: why didn't he already know how important he is
from his boss' perspective? He and his manager are not communicating.
Probably his manager is so busy putting out fires, he takes Bill's
contribution as a comfortable, reliable constant. Maybe it never occurred to
him that Bill is unhappy because he never asked for the opportunity to expand
his horizons. If this is the case, both parties are guilty of perpetuating
the status quo without considering the consequences.
Before Bill decides to stay, he must be sure his manager has seen the light
and will assume the mentoring role he's abdicated for so long. Bill will also
have to take more responsibility for his own career and be prepared to ask for
what he wants. Should he doubt either his ability to become more proactive at
his current company or his boss' commitment to promoting his career, Bill
should change venues and start fresh with a new persona and new management.
Probably Bill is not as concerned about the difference between the 10 and 15%
increase as about his career growth. The task force is an enticing
bird-in-hand that could give him the visibility he's been wanting while
maintaining his current support system. If he decides the immediate exposure
to task force participation is more promising than a promotion two years down
the road, he should take the counteroffer and get rolling.
In evaluating whether to go through with the move to a new employer, Bill must
decide both if his new boss will keep his promise of advancement within the
next two years and how important that promotion will be to his long-term
future. If Bill is fully confident of the integrity of his new employer, he
can devote himself wholeheartedly to making a major contribution and preparing
for the increased authority waiting on the horizon. But if his gut is telling
him something isn't right, he may want to get more information on the specific
process for moving up and the relative importance of his new position within
the company before making his final choice.
The We'll-Offer-You-More-to-Bring-You-Onboard Counteroffer
Jan has been seeking a new job for the last few months because a recent
banking merger eliminated her position. Since she has been through so many
downsizings in the industry, she has decided to concentrate her search on CFO
or Controller positions with fast-growing companies in need of management
expertise. Last week she received an offer from a hi-tech firm that fits her
criteria. She likes the job description, the people, the culture and the
opportunities for growth. The only problem is the compensation. The company
offered her $8,000 less than she (and the market) thinks she deserves. When
she told the CEO about her disappointment with the salary figure, he said he
would think about it. Today he called to offer her $6,000 more than his
original number, still $2,000 short of her goal. Should she accept the
Questions Jan Should Be Asking
Is this company of engineers naive about what a seasoned financial pro
can demand on the job market?
Or does the CEO just want to hire her "on the cheap"?
Is he discounting her expertise because it's different from his own and
consequently, not very important?
Is his unwillingness to meet her number a sign of a long-term Scrooge?
Or is he just concerned about holding down expenses and keeping her
salary in line with others already on board, until the company can afford
to move beyond its current compensation model?
If she takes the lesser amount, will it be a constant thorn in her side?
Or is the position sufficiently exciting that the opportunity outweighs
Given that she is unemployed, can she afford to reject this offer when it
might be a while until she gets another?
Jan's Thought Process
Often young companies run by entrepreneurs are rather tunnel-visioned about
things like compensation, especially for staff personnel. Couple this with
the tendency for engineers to generally be more interested in developing and
producing the product than putting together effective management systems and
you have a recipe for under-compensated, under-appreciated administrators.
The question is: does this company's CEO have the vision to realize that
technological expertise alone will not make his company a success? If he
genuinely believes that his firm needs good financial management to move
forward, he will do whatever it takes to find and keep the right people. He
may just not be financially or psychologically able to do it all at once. He
may need some educating, but he should learn quickly.
Perhaps Jan doesn't have to settle for his second offer. If money is tight,
maybe she could more easily get an extra week's vacation, a health club
membership, dues and fees to professional organizations and conventions, or
some other perks that would hold the line on salary while increasing her
overall compensation. A little creativity might be all that's needed.
Because she is changing industries and job descriptions, the CEO may want some
proof of her performance before he feels justified in giving her the income
she expects. Setting and evaluating specific quarterly goals for six months
before discussing salary again may give Jan the track record she needs to
increase her income.
Maybe Jan should ask more questions about company goals and spending policies
before making a long-term commitment. The CEO's resistance to meeting her
salary requirements might be a symptom of a general tendency to pinch-penny
every financial decision. If that's true, installing new systems, hiring more
people and keeping the best talent may be an ongoing struggle not worth the
There's a good chance that $2,000 will not make that much difference in Jan's
lifestyle, but it can have a tremendous impact on her attitude about her job
and management team. If she honestly sees the issue more in terms of
principle than a paycheck, she probably should reject the offer.
On the other hand, if the money isn't that important versus the opportunity to
build a company with a committed team of respected colleagues, she should go
for it. Corporate success will breed personal success and satisfaction.
The worst scenario for Jan would be taking a mediocre position at an
insufficient salary just to have somewhere to go every day. Doing a job she
doesn't like for less than she's worth can have a tremendously negative effect
on her self-esteem and long-term career options. She could easily find herself
discounting her expertise because she's not getting to use her best skills.
This is a no-win situation for everyone involved, including the company. Jan
should reject the offer and keep looking, even if she has to do some interim
temporary work to pay her bills.
A Last Word
While the decision to accept a counteroffer may seem to be strictly a money
issue, it's a lot more complicated than that. Job satisfaction, corporate
culture, personalities, personal responsibility, history and potential
opportunity all play a role in making the right choice.