This sounds like every employee’s dream. You have accepted an offer of employment with a new company. You like the company, you like their benefits, and best of all, you like your new salary. It’s all good—until you go in and tell your boss you have accepted another job and you are leaving in two weeks.
Your boss asks you, “How much more are they paying you?” On average, people leave their current company for approximately a five percent increase. But, as long as your boss is asking, you decide to tell him it is significantly more pay. Your boss says, “What is significant? 10 percent? 15 percent?” You respond by saying that it’s in that range. Your boss then responds, “Don’t tell anyone you’re resigning just yet, I think I can get the gods in power to match that offer.” Later that afternoon, your boss comes to you and says, “I have great news. We can match their offer by increasing your salary by 15 percent. So you’ll stay, right?”
So, now what do you do?
Although every situation is different, generally, we recommend that employees don’t accept or counter an offer for continued employment for the following reasons:
It’s not really about the money: Statistically, most people do not leave organizations just for more money. In our surveys, we find that people leave organizations far more often because they have a bad boss, they are bored with their job, they have little autonomy or empowerment, their department lacks teamwork, they don’t feel valued, they have no work-life balance, and/or the company’s values are not in alignment with the individual’s personal values. Even with more money, the reason you were leaving will still be there if you accept the counter offer. How much money would make it worthwhile to work for an ass?
You’ll eliminate your options: If you do accept your current employer’s counter offer, the company you interviewed with is not going to be happy they wasted their time interviewing you and will, most likely, never extend an offer to you again because you don’t keep commitments. That is not the type of personal reputation you want to build.
You’ll create resentment: People in your current organization will know that you held the organization hostage for more money. People in your own department will resent you because now they have officially learned that the way you get the big raise around here is by threatening to leave. If that resentment is not enough, your boss or other senior leaders may be actively recruiting for your position, possibly with someone at a lower cost, so they never find themselves in that situation again. No one, and I emphasize, no one, is irreplaceable.
Your next raise will be small, if at all: After a boss has given you a significant raise—a raise where you are now one of the highest paid team members—it’s much easier for them to justify a small raise next cycle, if at all. Even if you are not happy, what are you going to do, quit? Not a good option since you are now a highly paid employee and the competitor who wanted to hire you before, has rescinded their offer and never wants to see your face again.
Once you have made the decision to move on, and you have received your offer, you’re welcome to counter your new perspective employer’s offer to sweeten the deal. However, over time, accepting a current employer’s counter offer, statistically, does not go well.
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