Beware the Counteroffer

Don’t use a counteroffer as a bargaining tool.

I was prompted to write this post after reading an article entitled ‘Why You Shouldn’t Take a Counteroffer’ written by Alison Green, who gives advice on career, job search and management issues through her ‘Ask a Manager’ blog. Alison makes six valid points as to why you shouldn’t use a job offer as a bargaining tool to negotiate a better package with your existing company. However it implies you might be thinking of using a counteroffer as part of your strategy to get an increase in pay by candidates that are actively involved in a job search. But what about when an opportunity lands in your lap out of the blue, you’re a passive candidate who gets headhunted for example, are Alison’s points still valid?

Independent advice aligned with our experiences.

It’s difficult for headhunters to be seen as objective on the issue of counteroffers; their advice will naturally be viewed as biased as it’s not in their interests for candidates to accept counteroffers. That’s why I like Alison’s article; it’s independent and very much aligned to the advice we would give our candidates, with a couple of caveats.

Make you more vulnerable not more secure.

I believe it’s the minority that use this tactic to negotiate a raise in salary; as Alison points out it’s a very risky strategy and can change the relationship you have with an employer making you more vulnerable rather than secure. Also our own experiences support Alison’s comment that a high percentage of candidates that accept counteroffers find themselves back on the job market within a year.

Emotions cloud our judgement.

What I think is more common is when candidates genuinely go to give their notice companies do panic at the thought of losing good employees, retention ratios and the cost of finding a replacement suddenly become factors. It can be very flattering to hear that you are a valued member of the team and to have senior executives show an interest in you. Emotions and our natural resistance to change can cloud our judgement.

Honesty is the best policy.

Regardless of whether you are actively engaged in a job search or a passive candidate don’t lose sight of the reasons you accepted the offer to join a new organisation. If you are working with a headhunter be honest with them and discuss early in the process the counteroffer scenario. They can help manage the expectations of the client and avoid surprises at the offer stage, risking the loss of credibility with a potential employer. Headhunters are very well networked and have built their reputations with clients based on trust. It can be very damaging to these relationships if a counteroffer appears out of the blue and is accepted. You don’t want to be labelled with the minority that use this as a strategy to get a raise. Honesty is definitely the best policy here.

What have your experiences been when changing jobs? Did your boss try to counteroffer and did you accept?

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