Consider These Warnings Before Accepting a Counteroffer

Once you’ve decided to move from one company to another and completed the slog of your job search, what do you do when your boss offers a raise to keep you? The conventional wisdom says you should always summarily decline counteroffers, but does that really apply to every situation?

InterviewIn a word, No. Approaching counteroffers is a tricky thing, but sometimes–just sometimes–staying put with a better package can make a lot of sense. But be warned: When you do that, you’ve put yourself on dangerous ground.

Your Days Are Numbered

Although on the surface getting a counteroffer is flattering, a different reality may lurk beneath the surface. “Your manager may panic and offer you more money while he searches for your replacement,” notes Joe Kotlinski, partner and manager of IT Search at WinterWyman, a Boston staffing firm. “As soon as he finds someone to take your place, you become expendable.”

It’s true that managers usually shore up their bench once the cat is out of the bag. At the same time it’s difficult to replace a top performer with exceptional technical skills, so if you don’t burn a bridge your job may be secure for the foreseeable future. The keys to your security are your performance, stature and how your manager’s handled similar situations in the past.

Still, don’t kid yourself. You’re reputation isn’t going to be what it once was. If your company has historically replaced defectors or eliminated highly paid employees when business lags, keep your resume handy. When it comes to letting people go, your name’s going to be at the top of the list.

Your Increase Will Be Temporary

“Salary is only one part of total compensation, and things tend to even out over time,” says Mike Wondrasch, a vice president at Valley Forge, Pa., staffing firm AmeriSourceBergen. “You may get smaller increases or bonuses in the future, especially if your raise wasn’t based on merit or the attainment of new technical skills.”

Even if they’ve offered you more money, companies that tend to underpay don’t change on a whim. If your new salary is near the top of the scale or exceeds what others are making, you could face a cut after your manager plans for your departure, which he’ll probably do whether you stay or not. Be sure your counteroffer includes a genuine raise, not some sort of temporary bonus, and always base your decision on the whole picture, since we all know that salary and compensation packages rise and fall.

You’ll End Up Leaving Anyway

Although recruiters insist that 80 to 90 percent of employees who accept counteroffers depart within a year, that turnover is usually due to unresolved issues like a cultural mismatch or a lack of chemistry with your superiors. In those cases, there’s no reason to stay given the uncertainty of your future. On the other hand, it could be worth remaining in place if you genuinely like the company and your resignation results in a real promotion or a chance to learn new skills.

Your Relationship With Your Boss Will Be Damaged

If your boss is one of those who takes things personally or carries a grudge, you may never be able to mend the fence. If you’ve had an open relationship and he’s treated others well under similar circumstances, you may be able to carry on without fear of reprisal. Indeed, a manager who’s really paying attention to the dynamics of his team may have seen your move coming. Your resignation could give him the argument he needs to get you a better package. It’s rare, but it happens.

Still, occasionally a great opportunity will arise just when someone is about to leave, observes WinterWyman’s Kotlinksi. For instance, your boss could be moving on and has recommended you for a promotion or a high-visibility project. If your decision to leave stemmed from a lack of growth or opportunities, it may make sense for you to hang around.

5 Responses to “Consider These Warnings Before Accepting a Counteroffer”

  1. The Heretic

    Excellent Article Leslie!

    One small bit of constructive criticism, you start out strong but finished weak making excuses for poor management decisions. Let me explain.

    I would never advise or encourage anyone to ever take a counter offer. It is almost guaranteed that they will not be there more then a year, but not for the reasons you mentioned. I spend a lot of time talking to pedigrees and this discussion came up quite often. Here is the problem.

    You are giving the perspective of the demand side of the equation; recruiters, HR, employers, etc. The first rule of writing is to know your audience and write to your audience. Are they your audience? If the answer is no you should talk to the experts on the supply side of the equation; the pedigrees themselves.

    Here is what you are going to find out with a little digging. Resentment is the reason they don’t last more then a year. They use reason and they start asking themselves if my current manager is willing to pay me X amount now then why was it not willing to pay me that before. We live in a capitalist society and you show respect in a capitalist society with money. The new manager is showing that they respect the pedigree as a developer. Old management has a track record of showering them with the golden shower of disrespect and they will do it again business as usual.

    The possibility of a better position from a counter offer is so remote that it should be labeled a pipe dream.

    It all boils down to R-E-S-P-E-C-T and trust when making career decisions. If current management doesn’t respect you enough to keep your salary up at the market value then they deserve to loose you.

    It is all about managing manager expectations. Managers need to know that they will loose good people if they don’t keep up with market conditions period the end. They will fail as mangers, their projects will fail, and their repetitions/egos will be soiled! Learning by mistake is the hard way to learn, but it is the labor market dynamics way to learn. If you want R-E-S-P-E-C-T then never accept a counter offer period the end. Let them eat their mistake and learn from it the hard way.

    See, write to your audience and end strongly. lol

  2. The Heretic

    “Why would someone accept a counteroffer from a disrespectful manager?”

    Most software engineers fall in love with their creations and generally don’t want to leave a familiar environment for an unknown. They usually put up with a lot to maintain this relationship. In essence they are a little conflicted and they accept a matching offer to stay with their work. I’m sure that at the time it seems like the right thing to do, but they are only buying time.

    They have always suspected that they were being taken advantage of, but they didn’t know it for sure until another job offer is received. It takes time to fully process the new information and they prioritize the decision at hand. They simply accept the offers before the emotions sink in.

    Like I said in the other post, it eats at them and they start weighing the severity and impact of the betrayal on their families. At this point, they have irreconcilable differences with the manager. Eventually the resentment out weighs the attachment to their work and the love affair with their work is no longer fulfilling or relevant in future decision making processes. The working relationship ends as soon as another offer is acquired.

    P.S. I have two documented cases where employers made matching offers that included at will disincentive pay provision. Both ended with the employer invoking the at will prevision at a convenient time to the employer. Think of it as a stalling tactic and it seems to be a pretty common practice. It is just one more reason to never accept a counter offer from an employer after giving notice.

  3. The “Heretic” would be well advised to have another person proofread his/her resume. “Loose” and “lose” are two different words. A manager “loses” employees. A mechanic “loosens” screws.