In the August 6, 2019 Ask The Headhunter Newsletter a reader wants to use a job offer to get a raise.
Question
A competitor offered me a job with a higher salary. What is the best way to use this to ask my boss for a raise, and what could be the best speech to convince him?
Nick’s Reply
Using a new job offer to leverage a counter-offer — a raise in salary — from your current employer is almost always a costly mistake. In fact, it’s a kind of extortion, so let’s call it that, and let’s consider some of the risks you could face.
You’re marked
Even if this gambit works, you will likely be marked as disloyal and untrustworthy. The next time cuts have to be made, you’ll be on the list because you already threatened to quit over money. Management will be concerned you’ll be likely to pull this again the next time you get a better offer. (No matter how much your boss likes you, business exigencies usually trump friendships.)
Instant termination?
If you’re using this new offer to leverage more money from your current boss, be ready to start that new job ASAP, because you may be walked to the exit immediately. Some bosses don’t take kindly to threats, no matter how diplomatically you make them.
Paying for your own raise
If you succeed in getting a raise by holding your boss over a barrel, where do you think that extra money will come from? It will likely be an advance against a future raise or promotion. You usually can’t win at this game because the bean counters are counting dollars. Most likely, you will wind up paying that raise to yourself in some way.
They want you, so be happy
But there’s good news here, too. You’ve found a new job where they want you! If you’re motivated to take a new job in a new place because you’re unhappy now, getting a few more bucks to stay (assuming you can get it) isn’t going to change the fundamental problem of job dissatisfaction. If that new job is really great for you, just take it.
Go where they’re making you happy!
The “best speech” to give your boss is one sentence, and it should be in writing. You’ll find it here: Quit, Fired, Downsized: Leave on your own terms.
Do you want a raise, or a better job?
The bottom line is this. You need to make a choice, so compare your two options: Do you want a raise from your boss, or do you want a new job with a raise?
- Your current employer apparently doesn’t recognize your value, or it would have offered you a raise and/or a promotion.
- The new employer is putting its money where its mouth is — without any prodding. That’s worth a lot by itself. If it’s a good job, that’s who I’d want to work for.
I’ve seen people leverage higher salary out of their current employers when they get a bigger offer elsewhere — and it works out in the long run. But it’s very rare. Such a negotiation and accommodation requires great integrity on the part of the employer and the employee.
Work where it’s better
My advice: If the work, the job, the new employer and the money are all better, just resign and move on. Don’t look back at an employer who wasn’t willing to do right by you without a threat. Don’t forgo your future.
Have you ever tried to use a new job offer to get a raise from your current employer? What happened? Is there a way to extort a raise and mitigate the risks I’ve listed? Am I over the top when I refer to this gambit for getting a raise as extortion?
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(Caveat: I am not a lawyer) Since you stated you received the job offer from a competitor, did you sign a “Do not compete” form at your present job? Your current employer could throw that back at you as a counterthreat and tell you to suck it up. What’s your next move? Now you’ve antagonized your boss and effectively painted yourself into a corner. Although IMO most “Do not compete” forms may be legally toothless in the long run, do you want to be the guinea pig and find out? Follow Nick’s advise. You obviously value his opinions, otherwise why do you subscribe to/read “Ask the Headhunter.”
@John: That’s an excellent “gotcha” that I should have brought up in the column. An NCA could indeed cause problems. And you’re right again when you point out that NCAs are sometimes deemed toothless — but it could cost a lot of legal fees to get there. Like that guy on TV used to say, be careful out there.
I’ve been on the management side of this a few times. Even when a retention offer was made, that person was marked in our minds as someone we couldn’t really trust. I once saw someone come back to the well a second time and we said, “good luck in your new job!” Boy, were they mad.
If you really like the job you are in, just ask for a raise. Explain why you are worth it. Make a good argument and see what they say. If they give it to you without a threat that’s great! If not, take the new job. But I would never resort to threats.
“If you really like the job you are in, just ask for a raise. Explain why you are worth it. Make a good argument and see what they say.”
I came here to say this. If you have a concern about your current role and you’re future at the company, try to have an honest conversation with your boss. But don’t make any sort of harsh ultimatum, as your boss could easily call your bluff and tell you not to let the door hit your ass on the way out. In other words, you’re putting the cart before the horse in getting an offer before you’ve had a chance to rectify your current situation.
Which leads to this series of questions:
What exactly is the point/motivation for getting a job offer at a different company?
Do you like your current role/company? Why or why not?
What would it take to leave?
Can my current employer meet my requirements without holding a gun to their head? If so, what’s the point of going through the pain associated with a job search?
I think you’ll find if it’s simply a money/promotion issue, one does not necessarily need to have an outside job offer to solve it. If you eventually find that you’re tapped out at your current role, then it is time to leave and it’s likely not in your interest to play any sorts of games.
@David: Well put. I suspect that in situations where a person gets an offer and wants to use it to leverage a raise at the current job, the new job doesn’t really motivate that person. If it did, they’d just leave. My point is, people often interview for jobs “just because I can,” and then they have to deal with a job decision if an offer is made — even though they were never really motivated about the new job to begin with. Which leads to a bigger problem: I think most of the time people leave a job because it was the wrong job to begin with — they took it for the wrong reasons. The biggest wrong reason is that an employer flattered them with a job offer they weren’t really looking for, or that didn’t satisfy their real needs.
When I see someone trying to leverage a raise with a job offer, I see someone that doesn’t really want the new job. Which begs the question, why did they go through the process? The solution, as you point out, is to go talk to your boss about your job and compensation NOW, not after you’ve started looking elsewhere.
In my situation, I had a good job as a contractor when the job offer for employment came from another industry. I approached my boss and asked for advice. She wanted to know if she could come up with a counter offer. I agreed to wait a week. After a week, she told me that upper management would not be able to hire me as an employee. She said that she tried to convince them to hire me, but they wouldn’t budge. So I took the offer and we parted ways on good terms.
Contractors are in a different situation than FTEs. You are contingent and can be cut loose anytime despite what the contract states. You handled it appropriately and the counter came from her. I’ve seen it happen both for FTE and contract offers, the latter for more $ and/or two reasons (commute, relo).
@William: There’s a powerful tool in your comment — asking for advice. If you have another offer and are truly torn, don’t ask your boss for a raise and see what happens — ask for advice.
This may seem to run counter to my advice to never tell anyone you’re leaving (or where you’re going), but there are special cases. Approaching your boss in such a situation can be quite risky, but if you’re going to do it, couching it as a request for insight and advice is a deft way to do it. It changes the tone of the discussion entirely. I’ve seen it work, but the relationship between the person and the boss has to be strong and based on solid mutual respect.
Be VERY SURE you understand the business dynamics before negotiating.
My father–in–law (retired CEO) was advising a friend that due to a market slump she would need to reduce headcount by at least 3 people. She was reluctant because she cared for her employees almost like a mother cares for her children but she understood the wisdom of the advice so she began to contemplate who would have to go. While she was stewing over a list the next morning, an employee came into her office and after little preamble announced that if she did not get a raise effective immediately she would quit.
The answer “very well, I accept your resignation” undoubtedly was not what she expected to hear.
Here’s a similar tale of salary extortion. Sorry for the length
Long ago, I worked in HR in a quasi-governmental place in DC where there was a real jerk in the accounting department. Over a couple of years, the jerk started getting getting weird and behaving in ways that should have gotten him fired but nothing ever happened. He appeared to be collecting personal information about management employees and he was getting stalkerish. I even caught him going through my boss’s trash can. Based on the organization’s origins and mission as well as info that I was privy to in my role, I surmised that he had learned somemthing that management did not want to be made public, that they knew about it, and that they were stuck between a rock and a hard place. The jerk would probabaly go straight to the Washingtopn Post if they fired him. There was a real risk at the time that bad publicity could sink the organization funding, disrupt the mission, destroy good will that had been tough to gain, and even affect foreign relations. There were a lot of other strange things with this guy and I avoided him whenever possible
We were paid based on the GS scale which for some jobs, like accountant and budget types, were on the low side compared to the private market in DC. The weird jerk started grousing about how he could make lots more money elsewhere and was ramping up a campaign to get bumped up a grade or two. Early one Monday morning, he walked into his boss’s office (door opposit my desk) holding a newspaper and closed the door. When he left that office, there was a flurry of activity including my boss, the HR head, dashing over to our Big Name outside counsel’s office with big boss.
When they came back, the jerk was called in to meet with his boss and the HR head. It seeams that hen he met with his boss earlier, he showed him a want ad for an accountant at a starting salary 25% or so above what he was making and said that if he was not given a raise to that level, he was quitting. This meeting was to inform him that no raise was forthcoming and his resignation was accepted. A letter (drafted by the outside counsel) was presented for him to sign in exchange for a modest severance and a lukewarm reference and stipulating that under no circumstances could the jerk disclose any information about the organization or its employees, past and present, or there would be trouble for him. My boss said that the look on his face was priceless. He was supervised as he collected his belongings and perp-walked to the street. The receptionist was given instructions to never buzz him through the door.
@Cathy: Whew! What a story! But this cuts both ways. Suppose the organization had done something illegal and this guy was a hero whistleblower? In a case like that, he’d be foolish to sign a non-disclosure and non-disparagement agreement just to get a few “severance” bucks. My point is that the employer’s tactics for burying an employee are common and troubling — it’s worth thinking about if you’re ever in a situation where you want to quit but don’t in order to protect, say, your unemployment benefits. In that frame of mind, it’s easy to panic, take what you can get, and run. But the better approach might be to dig in, negotiate (get your own lawyer), and get a good settlement.
Again — I’m not commenting on the story you told. I just wanted to take the opportunity to highlight tactics some employers will use to get rid of employees they don’t like. Thanks for posting that!
If you want me to consider giving you a raise, be a professional and come to me with facts that justify your request for an increase in remuneration.
You should be able to demonstrate your increased value to the success of the department and the corporation. Have you done well with your past years professional development plan, what successes are there, what failures and how will you address the difficulties and challenges facing you. Do you feel that there are areas where you could contribute more to the corporatiosn goals and successes and who would you do that.
Seriously, give me an ultimatum, and you’re unemployed. I believe that the corporation. although comprised of different layers of management, is collectively a team. Each of us has a responsibility to the success of our corporation, our departments and our colleagues. As we all continue to grow, so does the business.
Threaten the business and you’re no longer a team player, you’re an individual and your ability to contribute to the growth of the corporations and your colleagues has just reached nil.
Business is not a game of manipulation. Business is a matter of good relationships, with those you work with and and for and the customers that purchase our services and porducts.
There’s another thing to consider, and Nick hit part of it. You could get terminated for using the new job offer as a raise extortion. But there’s another concern here besides just being terminated. As Nick mentioned in another article, never assume an offer is there before you have it in hand. You could not only end up being fired, but the other company could end up letting the offer fall through in the meantime, meaning you’ve lost both the job you had and the one you were offered.
@Mongoose: Thanks for raising an issue I should have discussed in the article – exploding job offers. Are you sure you’ve got the new job nailed down before you talk to your current employer? I covered that in another column that I should have linked to above:
https://www.asktheheadhunter.com/8454/protect-yourself-from-exploding-job-offers
This is why I love all you guys — you keep me honest and your advice is better than mine!
The company culture in which I work has an unspoken norm where nobody gets raises. The value balance is that the environment is flexible, relaxed, and welcoming of remote workers / work from home. Great for people with kids. So raises wind up being a consequence of someone giving notice, where management selectively counters with a retention raise on an as-needed basis.
A contractor who was desperate to become a permanent FTE approached me for advice. I told him how the machine worked. He kept returning with the same question, as though the job fairy was going to magically reward him if he asked sincerely with all his heart. Eventually he made the effort to land a competing job offer. But instead of graciously offering his two week notice, his bitterness caused him to wield it as a threat, “I’ve got another offer and if you don’t cough up some money, I’m outta here.” His undistinguished abilities were overshadowed by his desire to be taken care of (workplace as surrogate parent); the two week notice was accepted.
@Phil: No surprises in that story!
But you used an expression that I’m afraid causes trouble in many ways: “if he asked sincerely with all his heart”
This happens when people are pursuing a job (well before any offer). They believe that because “I really, really want this job,” or because “I know I’m the best candidate,” the rest is all about “how do I get this across to them?”
But, what you think isn’t the point. What the employer thinks is all that matters.
If you haven’t gotten it across to them, then you’re probably not right for the job, no matter what you think. The contractor in your story probably did some growing up. :-)
Great advice and stories from everyone. The only people I’ve seen be successful at forcing more money from management were folks that were very well connected. Since they had friends in high places they knew their chances were good but the aftermath was that they lost a lot of respect from the rest of their peers. But this is a very slippery slope and has a lot to do with not only the company culture but also the personality of the manager you are trying to extort.
I saw this first hand when a colleague of mine forced management to give him a raise (which in all honesty he deserved because he was our top performer) but in doing so he put his head smack on the chopping block. He got that raise initially, but once upper management stated that we needed to trim the fat from our ranks this same individual was ushered out the door without so much as a goodbye.
During my early years with this same company I became unhappy with my role as I was also overworked and underpaid just like the colleague mentioned above. And the hilarious part is that we were told, quite often that our company encouraged employees to “create their own career” path and to check the internal job postings regularly to take advantage of “career opportunities”. Sounds innocent enough, right?
I saw a few people do this, but they had managers that actually followed the rules. In my case I applied for an opening for another position and had a great interview that seemed promising. But within hours of my interview I saw my direct manager sitting in the office with the other manager who had interviewed me and it was then I realized something was wrong. I went back to talk to the manager of the new team and he looked very nervous, refused to make eye contact and told me that unfortunately I was told I wasn’t a good fit for the position.
And it got better. My old boss (who now co-managed the team with my current boss) called me into his office and asked me why I wanted to leave. He was so upset that he had water in his eyes and nearly burst into tears. Apparently that company rule didn’t apply here because I had clearly been labeled a traitor and there was no turning back. Never mind that I was so underpaid that the new hires that I was mentoring made more than I did and I was also a top performer, loyalty to the team is what really mattered.
And it should come as no surprise that Mr. Waterworks was the same manager that fired my colleague who had forced the raise out of him.
My head was now on the chopping block and my managers were never the same after that. Thankfully a much better position opened up on another team and this time they didn’t try and prevent me from leaving (or perhaps they tried and failed, one will never know) and that became my lifeline. I’m not one to believe in karma, but I stayed with that company long enough to see all three of those managers head out the door (two voluntarily, the other not) and that includes the one who let my old boss prevent him from hiring me.
Just some food for thought!
@EDR: File that one under “we have policies, but policies don’t apply.” It’s not uncommon for a manager to block an employee from changing departments, even if HR happily promotes the idea that “you should apply internally for any job you want!”
It’s important to look at the company’s history before you try to use the policy for your advantage.
Nick hit the nail on the head. You should go interview at other places FIRST – then based on those interviews, you can decide whether or not to go to your boss and ask for a raise. Chances are, the companies you interview with will give you the raise you’re looking for. You can also find out through Salary Surveys what you’re worth in the marketplace. Make sure you have enough good reasons to ask for a raise from your current company
I’ve become extremely skeptical of looking up reliable salary information online. The only data I trust these days comes from people I know who work directly at the companies that I’m applying for. I once had a very long talk with a contact who is a manager at one of the big tech giants and he provided some enlightening info on their salary structure that I would have never found online. Same goes for another friend who works at one of the other big tech giants…these are the people who really know what people are being paid.
And these conversations have revealed more than just base salary…we also discussed bonuses, RSUs, 401k etc to get the real details on what a full compensation package would look like. I’ve also interviewed for quite a few other jobs in my field and when I can get the recruiters to share this same information (not an easy task) this all goes into the Rolodex I keep in my head. This information has revealed to me that the salaries you find online are pretty far off the mark. I’m sorry, but I can’t trust salary info from random anonymous surveys on the internet…we don’t know who provided and if it is even real.
In the past I’ve made the mistake of relying on that same information and going through 2nd and even 3rd interviews without discussing salary and that is no one’s fault but my own. Reading this blog has allowed me to up my game and to stop allowing employers who won’t reveal salary info until you dance like a monkey to stop wasting my time.
I used this information recently when a company tried to lowball me regarding the salary for a new job opportunity. They kept insisting that my salary requirements were too high and they were paying the industry standard, but they were either lying through their teeth or living in la-la land.
Funny that their salary matched the range that you can find online for my exact job title, and perhaps this isn’t a coincidence. Good riddance. :)
@EDR: Thanks for getting up on my soapbox about salary surveys! Nice job explaining it! Getting a real idea about what a job is worth is a lot of work, but worth doing.
See also https://www.asktheheadhunter.com/11910/glassdoor-salary-data
Robert Half annually publishes a Salary Guide. Here is the link to get your 2019 copy. https://www.roberthalf.ca/en/salary-guide
From what I know, they do an annual survey, through a thrid party and the results get rolled up into this guide.
Our Federal Government, The Government of Canada also rolls up salaries across Canada, Statistics Canada data goes into the Job Bank, this link has information, https://www.jobbank.gc.ca/wagereport/location/geo9219 and wages are talked about on a per job basis according to the NOC, https://www.jobbank.gc.ca/marketreport/wages-occupation/18010/22437 and they present an outlook for students to consider, https://www.jobbank.gc.ca/marketreport/outlook-occupation/18010/22437 as well as a heat map for where the higher paying jobs are in Canada, https://clmi-explore-icmt.ca/viz?page=wages&lang=en&noc=2241&geo=43.653524,-79.383907&view=ER#4/54.31/-92.73
I would be surprised if the Government of the United States of America did not also provide similar statistical data for you folks to look at.
NOC (National Occupation Code) https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/express-entry/eligibility/find-national-occupation-code.html
NAICS (North American Industry Classification System) https://www.statcan.gc.ca/eng/subjects/standard/naics/2017/index
The above links are for further research and reference in Canada.
Americans may find similar data here, https://www.bls.gov/home.htm
Years ago as an employer we hired an exceptionally talented and capable person for what to us was a bargain salary. She was performer and became invaluable in a few months. Just before her first anniversary, she announced she was leaving for new-job that had a considerably higher salary that we couldn’t come close to matching. In her best interests I had to wish her well and congratulated her for new position and thanked her for all she had done for us.
Lesson learned: hiring great people on a bargain salary is not good business even in the short term, let alone the longer term.
You get what you pay for is often true.
One thing I’ve often heard than when you pay people the bear minimum, expect to get these in return:
Minimum effort
Minimum competence
Minimum commitment
Minimum skills
Minimum education
Minimum contribution
And so on….
The first day of my college management course our teachers told us that if we remembered nothing else from the course, there were two rules to good management to always remember:
1) Hire good people
2) Pay them well
That was 20+ years ago and I wish I could say it has been the rule instead of the exception in my experience.
Pay people poorly and the good ones will stay just long enough until something better comes along. And the ones that remain…well David has it spot on.
I’ll add my two bits, which I learned from my brilliant lawyer, who’s actually a business development expert: Always make a deal a win-win, or don’t do it.
Never try to get over on the other guy. Pay for something what it’s worth, not what you can get away with.
My favorite HR manager in the world has a clear policy that she makes hiring managers in her company stick to: If a job candidate you want to hire has been under-paid, bring them up to par, even if it means giving them a seemingly huge raise in the job offer.
The goofiest HR manager in the world is one I quoted in my PDF book, Keep Your Salary Under Wraps. She upbraided me for telling people never to disclose their salary history:
“Employers want your salary information because they believe that if you apply for a job that starts at $50,000, but you made $30,000 in the same sort of job at your last company, they’d be overpaying. They’d want the opportunity to buy you for $35,000 to start, saving them $15,000. The HR person who does that gets many kudos for their shopping moxie from their boss, and gets to keep their job and go on many more shopping trips. I’ve been a vice president of HR, a recruiter, a labor negotiator and a candidate, so I know from which I speak… I am so dismayed that someone pays you to hand out this kind of information.”
Wrong.
@Nick: This is the second time in the last couple of months I did not receive the weekly Q&A. Do you know why? As you know I have been signed up for your newsletter for years. Thanks.
@Marilyn: You’re not receiving the newsletter because your e-mail service is blocking it, according to my delivery logs. Please check your e-mail for more information. You might try the suggestions here, too: https://www.asktheheadhunter.com/newsletter-subscription-suggestions
In my experience, most people who use this tactic, end up on the losing end of the deal, if not then and there, later down the road. When its time to go, then go! Again, why isn’t your employer compensating you at market value?? Why are you suddenly worth more $$ when you resign?? Besides, doing this, is shaking your death rattle. Many employers will show you the door. I say cut your loses and go. Further, if its a lateral move, and a hostile and toxic work culture, I say WALK!!
I once used a competing offer but there were some boundary conditions to it:
1.) I got a promotion where the policy at the company was to wait about a year to have the pay match the responsibility. My “pay” promotion was overdue at 18+ months and counting. Each time I brought up the subject, my manager would have some excuse like “…budget is tight or others have been waiting longer, etc.”
2.) I showed him the offer from a local competitor with the understanding that I wasn’t planning on accepting it, but wanted him to let him know what the market thought I was worth. It was approximately a 25% raise and the total salary was not out of line for the industry or my experience level.
My manager had a surprised (frightened?) look on his face and went down to HR–that same day he told me my raise would be effective next paycheck for the exact amount as the new offer. I later learned that when “special circumstances” are presented to HR by a manager, they can make accommodations.
It’s clear that at that company HR tries to see how much they can get away with and if the employee never says anything, then they let sleeping dogs lie.
I worked for a few more years there and eventually moved on.
Using a new job offer to leverage a raise in salary from your current employer is almost always a costly mistake.