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No, I Won’t Accept Your Counter Offer

by Ryan Guina

As most of you know by now, I resigned my job last week. The biggest reasons I resigned from my job were career stagnation and lack of job satisfaction. I approached my managers multiple times over the last 9 months or so to try and find something more challenging within the company, but I was told nothing was available.

This has been a long time coming, and I gave my managers plenty of time to work with me. In fact, I was a little surprised that they were surprised when I resigned.

The counter offer

Shortly after I came into work yesterday morning my manager asked to see me. I closed the door to his office and sat down. He started off with a little small talk, “How is the transition plan coming?, I hate to see you go,” etc.

Then, he made his offer. “Ryan, we like the work you’ve been doing and we want you to stay. I sat down with my boss, and he agreed that you are a valuable asset to our company. After crunching numbers and getting corporate approval, we are prepared to make a counter offer to keep you here.”

I didn’t give any response because I was already 99% sure that I wasn’t going to accept any counter offer they made. But I let him play his hand.

When my manager saw I wasn’t going to ask him how much the counter offer was, he proceeded. “As you know, things have been tight, but I was able to convince upper management that we needed to keep you here. They gave me approval to offer you a 20% raise.”

His offer was met with silence from my end. He waited for my reaction, but I didn’t really have one. I was impressed they offered a 20% raise because that is very high for my current company. But, money doesn’t address the reason I looked for a new job in the first place. He looked at me with expectation in his eyes. I declined his offer because I am not interested in staying with my current company.

He asked what it would take to keep me, and I told him I had already made my commitment to another company. He pressed for more details about my new job, and I eventually told him the job offer I accepted came with a 32% raise. At this point, it didn’t bother me to share that information. Our professional community is fairly tight knit, so I think they could have found out the rough numbers anyway. But I stressed that the money was not my driving factor for leaving – it was a combination of things, mostly career opportunity and growth.

He asked me to wait and he came back a few minutes later with his manager and the guy I ultimately report to. Long story short, they ended up offering to match the salary offer I received from my new company. I thanked them for their time and for the offer, but I stood firm. I was not accepting the counter offer.

Why I won’t accept the counter offer

I tried for 9 months to get a different assignment within my company. I talked to managers within and outside my work stream (with my direct manager’s knowledge). However, the company is doing some restructuring and they asked me to be patient. I showed more than enough initiative and patience, and in the end, my company didn’t meet my professional needs.

What I don’t understand is why they suddenly perceived me as valuable as soon as I mentioned leaving? It’s frustrating and I was a little upset until I decided it doesn’t matter. I am leaving.

There are other reasons I won’t accept their counter offer.

  • I gave my commitment to my new company. I signed a job offer, and I don’t want to burn a bridge I just built.
  • Perception. I didn’t want my coworkers or managers thinking I was staying around until I could find a better opportunity.
  • My future with the company. Would accepting a counter offer affect my chances at promoting or receiving raises? Or would I be perceived as a flight risk and relegated to menial tasks until they could find a replacement.
  • Would my role change? The main reason I am leaving is not money. While a 30% raise is enough to make me consider leaving, that was not my main motivation. What they don’t realize is that I never would have submitted my resume or application elsewhere if they had worked with me sooner. Even with the counter offer they gave me, they didn’t address the underlying issues of job satisfaction and career growth.

Be prepared for a counter offer

I had an idea my company would make a counter offer, so I prepared for the offer before I even submitted my resignation. I made a list of all the issues I had with my current role. Reviewing these issues before accepting the new job offer and before turning in my resignation was very beneficial in helping me make my decision.

Not every company will make you a counter offer, but if they do, you should be prepared for it before you resign. Otherwise, you may decide to do something before thinking it through.

Accepting or declining a counter offer is a personal decision

In the end, you know what is best for you. But I strongly recommend being prepared for a counter offer before you even resign, then looking at all your options before making a decision to accept or decline a counter offer. Will the counter offer resolve the underlying issues that forced your resignation? Will money alone fix the problem? Do you need a flexible work schedule? How about a different role within the company? Only you know your situation, and only you can answer those questions.

Here are a couple articles I found very helpful in forming my personal decision:

10 Reasons I Won’t Accept a Job Counter Offer by Ron @ The Wisdom Journal. Ron has a lot of professional experience and his thoughts are extremely well presented in this article. I met Ron a couple days before I resigned and we talked about a few of these topics. Talking with him in person really helped solidify my decision.

Accepting A Counter Offer Can Be Risky Move by Jason @ Frugal Dad. Jason uses examples of being branded as disloyal or causing jealousy among peers if word of a large raise gets out.


Published or updated May 15, 2008.
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{ 27 comments… read them below or add one }

1 Dividend Growth Investor

Wow, i am learning so much from your blog. I definitely enjoy the way you take your readers inside your mind and decision making process.

It’s funny though that at most companies they appreciate their “most important assets” when these assets are ready to move to a different place. To me the word “restructuring” from the old company sounds scary, so I totally agree with your decision. If you had stayed, sure you would have made more money, but then you will be the first one to go if restructuring starts again, since you are highly paid now.
Even if they didn’t let u go at future restructurings, your company had shown you a lot that they are inflexible.

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2 Ryan

DGI,

The way I see it is that if I am going through these situations, I’m sure others are as well. So I may as well share what I’ve learned with others. I’m glad you are learning from my site. :)

I wrote “restructuring” but they aren’t really doing layoffs in my city. They are changing some of the ways they do business, so I guess I could have been a little more clear about that.

But, yes, if they were to go through layoffs, I think people who have shown the willingness to leave would be more likely to be laid off first.

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3 KMC

I don’t want to say “never,” but it’s almost never a good idea to accept a counter-offer as far as I’m concerned. I don’t remember the exact statistic, but some very large fraction of people who do so end up moving on (one way or the other) within six months.

Congratulations, Ryan, on the new job and thanks for writing about it. It’s been fascinating reading.

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4 Frugal Dad

Ryan, I wondered if you may be faced with a counter-offer decision, and it seems you made the right move. I’m glad my article influenced you in some small way.

At my last employer we had several people play the “I’ve got other opportunities” hand to force corporate into making counter-offers. More times than not, it backfired as word got out and their peers lost respect for them.

In your case, the reasons for departure were not entirely salary-based – you were looking for new challenges and new opportunities. It’s hard to counter that if you’ve done nothing to grow someone professionally over the last nine months to a year.

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5 fathersez

You did right.

You have given them 9 months and only now they come up with this. For sure it must be with heavy hearts. Unlikely to be good in the long term.

You are right in keeping your commitment to your new employer.

Cheers

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6 mapgirl

Interesting. I left my last company, but because I had a really good relationship with mgmt, I told them not to bother with a counteroffer because it would be wasting their time. My mgr knew I was leaving b/c they couldn’t grow me technically in the company without a move to Texas. He also knew that he couldn’t get me more educational training from the company because there was little money for it. My manager did the best he could for me over the years, but long-term he knew my current company would be better for my career.

Sometimes, it’s worth it to have your company make a counteroffer. At one point during that last job, they did make a counteroffer when I received a job offer in Seattle and I accepted. But I dislike having making people make a counteroffer without a conversation about what that offer needs to contain to make me actually stay. Since my boss couldn’t do anything for me that would make me stay, we decided that counteroffering was a waste of the company’s time.

I totally agree that burning bridges is bad. I’ve done that with hardly any regrets, but I am much more careful about it now because I have a lot more at stake as my career grows.

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7 FFB

I hate that companies do this! Why did it take so long to figure out you were valuable? If you are so valuable then you needed to be compensated a long time ago. I know money isn’t the only consideration but it does go a ways in a company showing how they value you.

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8 Ryan

KMC,

I agree. Almost never is the best way to put it. Thanks for the congrats. And I thought your job situation was pretty good reading too. The internet makes for a great resource sometimes! :-)

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9 Ryan

Mapgirl,

Your situation sounds interesting, and it’s good that your management recognized your need to grow professionally.

I think for my situation, I was earning them a lot of money in my current role and it was easier to keep me where I was than to let me branch out. I understand a business’s main objective is to maximize their earnings, but now they not only lose me in that position, but they lose me from the company. It’s too late for them to do anything about it now though.

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10 Ryan

Frugal Dad,

I’ve seen people play the “I’ve got another offer” card before too, and sometimes it backfires horribly. I’ve even seen the aftermath of a manager look the employee in the eye and say thank you for your service, gather your stuff and leave. The company was faced with cutbacks and he made their mind up for them. Very ugly situation!

As for me, money is important, but it wasn’t the driving force behind my leaving, so at that point there wasn’t much my company could do to keep me.

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11 jim

Good decision not to take the counter offer, I would never accept a counter offer if I was leaving… especially given your experience. Congratulations!

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12 mapgirl

Ryan,

My manager was an old co-worker from another company and we’re pretty good friends. Our next level manager had also known us from the prior job as vendors and knew our value. He knew he could only keep me for so long and was very gracious when I told him where I was going and why. Sometimes, it’s easy to read the chips when they fall. Those two managers were great about counteroffering when I was faced with the first opportunity to leave because there was definitely room for negotiation. Unfortunately for them, there really wasn’t any room left the second time.

I suppose I was lucky. Later my direct manager asked if I really would have left for Seattle if the counter had not come through. I told him I didn’t really know. I had called movers and gotten estimates. My best friend from college offered a basement room rent-free in Seattle so I could sell my condo in Virginia without financial pressure. I did all the things I was supposed to do, but something just didn’t feel right. It’s a dangerous game to play, but I guess a person really has to ask themselves why they were looking at other opportunities and if they could really change their current situation. I had done the best I could and though I could have stayed at my old job very happily for another year or two, I was looking at 5-10 years down the road and when viewed from that perspective, everyone agreed I did the right thing and wished me luck.

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13 Ron@TheWisdomJournal

I’m glad I could be one small part of your decision making process. You obviously were valuable all along, they just didn’t realize it. Make me wonder what would’ve happened f you told your old company that they doubled your salary! LOL! That would set some wheels to spinning!

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14 plonkee

I’m glad you didn’t accept the counter-offer. It wouldn’t have made any sense given that what you weren’t happy with was the professional opportunities – they aren’t going to magic them out of thin air.

Everyone I’ve worked with who has stayed after a counter-offer has left within a year. Almost never sounds like a good standard to use.

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15 deepali

The counter offer is pretty much a requirement, and your company loses nothing in making it. And if you accept, they win, because it’s more expensive to hire someone to replace you, than to pay you more.
Still, glad you didn’t take it, and it’s too bad they didn’t realize what it would have taken to make you stay 9 months ago!

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16 David

You should have taken the counter-offer…I mean, who wouldn’t want to work somewhere that you were only deemed valuable and worth more money once you said you were leaving? ;-)

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17 Kirk

Good for you, Ryan. You made the right and noble decision.

Accepting a counter offer isn’t a bad idea if the company shows you a path that matches your desire, but this company wrongly thought throwing cash at you would be enough.

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18 Ryan

Kirk,

Yeah. The situation is that I was highly profitable in my current role and I think I was making them so much money that it would have hurt the bottom line to move me. I mean, they could have still given me a 30% raise and remained very profitable. I guess the bottom line is now officially hurt!

But that wasn’t my intention. My intention was growing professionally, and my company was not willing to afford me that opportunity. So I made my own opportunity. ;)

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19 Pinyo

That’s absolutely the right thing to do. In 99% of the cases, it’s better to walk at that point.

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20 ideal4investors

You did the right thing not taking the counter!

The time to take the counter offer is before you resign. You go into your boss and tell them you have another offer of X (more salary, flex time, job title, whatever the incentive was to leave). Usually, the boss will ask you when you need to make your decision by and they talk to HR. You usually can get what you want. Of course, you should only do this if you want to remain at your current job. You do not want to take the counter after you made the announcement to your colleagues, because it leads to gossip, envy, etc.

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21 Ralph

What I don’t understand is why they suddenly perceived me as valuable as soon as I mentioned leaving? It’s frustrating and I was a little upset until I decided it doesn’t matter. I am leaving.

I wished you had asked them that. Even if the answer isn’t something you really care about it may have planted the see in their minds that keeping quality personel isn’t about being reactive to their desire to leave.

One word of advice though for anyone who is considering the advice from ideal4investors above; I work as an adjunct to the main MIS department at my company. The moment any MIS employee or adjunct employee tells their supervisor of another job offer, they are escorted out of the building and all access to the corporate infrastucture is cut off. Just something to think about if you are a professional who plays a role involving confidential corporate information.

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22 Ryan

Ralph,

Good point about the MIS jobs, and that also applies to other jobs as well. Some employees who deal with proprietary info are on a short leash when it comes to things like this. It is easier to kick someone out immediately and find a replacement compared to trying to reverse the amount of damage that could potentially be done by a disgruntled employee…

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23 Gates VP

Lots of great links and all kinds of neat ideas and lists of reasons “not to accept a counter-offer”.

But I think the reason is simple. You don’t want to work for anyone who feels that the counter-offer is a good idea. Sure it’s an ego boost for you, but it’s really desperate management decision. Do you want to bank your future on desperate management?

The game is simple, an employee generates X revenue and the company pays that employee Y, where Y is X minus expenses and a risk-adjusted profit margin. In fact, it’s a lot like the stock market (actually, it is the stock market, but that’s a different discussion). Either way, the goal of the employee is to maximize the hourly yield for the work they’re willing to do, they want to maximize Y. The goal of the employer is to maximize profit, they want to maximize X and minimize Y.

The problem of course is risk. If you “over-minimize” Y, then you drain X (lower productivity) or you lose X all together (employee leaves). In the grand scheme, employers have been doing a lot to minimize Y: reduction in pension, reduction in health care allowances, no more 20-year gold watches or 10-year sabbaticals, etc. But many employers still insist on making some silly decisions with Y.

In Ryan’s case, the competition was willing to pay 30% more Y. Assuming that Ryan could generate an equivalent X, the company felt that Ryan was a small enough risk to pay him 30% more.

That’s a very big difference in evaluation. That’s the same thing as me thinking a stock is fairly-priced at $100 when you think it’s fairly-priced at $130. Of course, we hear about lots of 20 & 30-somethings jumping jobs to make these types of pay raises.

There are typically three reasons this happens:
1. The company is doing poorly and cannot afford to pay the employees more. Or they’re likewise not generating money from having the employee around.
2. The company is trying to extract as much profit as possible from the employee or using the employee’s profits to fund a different venture.
3. The company really has no clue (typically poor management). Any/all of: they don’t know the market rates, they don’t know which employees are generating money or losing money, they don’t have a growth plan, they don’t have a succession plan, they don’t understand what the employee really wants…etc

In a case like Ryan’s I’m sensing a heavy dose of #2, with a little #3.

What I don’t understand is why they suddenly perceived me as valuable as soon as I mentioned leaving?

It’s up to management to manage and mitigate risks and they really blew this one. (And remember the profits they make are their “risk-adjusted” piece of the pie) Not only did they underestimate your value by 30%, they also underestimated the value of their counter-offer by another 10%. That they would even go back to “up the ante” again means that they were still suffering from a #2 brain fart.

So back to the original thesis. You don’t want to work for these guys.

If they suffer from #1, then they’re likely laying people off and even if you don’t lose your job, you won’t be getting a good pay raise. If they suffer from #2 and they’re underpaying by 30% (or more), then they’re not showing a lot of foresight. If they suffer from #3, then you’re resting the fate of your next raise, your next promotion and even your next paycheck on the back of someone who doesn’t have a clue.

You don’t want to be working for these guys. You want to be working for proactive managers. You want people who have vision, who can see problems before they arrive. You want people who lead, people who hire more staff before everyone gets too busy, people who give pay raises before you have to ask for them, send you to training before you need it.

So if your employer makes a counter-offer, they are not one of these people. They’re one of the hordes of reactive managers. Just because they’ve finally realized they’re behind and can afford to pay you more doesn’t mean that they’ve changed their ways and stopped being bad managers.

So don’t accept a counter-offer, you don’t want to work for the type of people who make counter-offers.

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24 Gates VP

Wow, sorry Ryan, that devolved into a blog post, please see here:
http://gatesvp.blogspot.com/2008/06/counter-offers-when-leaving.html

and feel free to delete the previous comment.

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25 christina

Wahhh!!!!

Be happy you even had a job…. It’s greedy people who think they are invaluable or deserve better. We work hard and if we are lucky we can retire. Most people now days will never. Why do people think our economy got in this situation its because greedy people getting paid too much.be glad someone is even willing to keep you around. Your lucky just for that. People stop being greedy.

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26 Ryan Guina

I was grateful I had a job, and I was even more grateful for the other job offer I received. The reason I turned down the counter-offer had nothing to do with greed or feeling invaluable – it had everything to do with wanting a more challenging job and a different work environment. I had the offer in hand, and I accepted it. There is nothing greedy about seeking to improve oneself. That is a highly desirable characteristic which many employers seek. On the flip side, not wanting to improve oneself is a red flag which many employers seek to avoid.

As for the economy, there are many complicated reasons the economy went bad, but I don’t think it had much to do with employees earning too much. It had more to do with poor lending practices and greed at the corporate level, which filtered down into the masses with people spending more money than they could afford. But that has nothing to do with earnings, it has everything to do with spending – those are two distinctly different things.

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27 Gates VP

It’s greedy people who think they are invaluable or deserve better.

OK, so if a medical doctor is earning minimum wage and feels they deserve better than a burger flipper that makes them greedy? From a perspective of social good, it’s pretty clear that doctors carry a relatively high value, but that hardly makes them greedy.

I’m pretty sure your logic only holds in very heavy-handed socialist societies. Even people within communist societies would afford a doctor more intrinsic value than a food assembler.

…our economy got in this situation its because greedy people getting paid too much…

Look, there were definitely greedy people involved in the chain of the recent financial collapse, but it was clearly much more than that. If anything, the key problem was the poor incentivization of people in general. We paid lots of people lots of money to do things that were not necessarily in our best interests.

But it’s not necessarily a matter of greed. Lots of people just did exactly what they were paid to do. It simply turns out they were being paid to do the wrong things.

… be glad someone is even willing to keep you around…

The goal of employment is not subservience. Employment is a partnership where people jump on a team together and make something happen together. The money is just there as a representation of the division of skills and risk.

But you are in no way a slave to your boss. You are making your boss money. You deliver some product/service that they resell and that makes them money. But this isn’t slavery, you’re both free to end the relationship and go somewhere else.

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