Receive a Job Counter Offer? Don't Take It

Commentary
Receive A Job Counter-Offer? Don't Take It
Hal Reiter 06.30.08, 3:00 PM ET

A few years ago, I recruited an executive to run a mid-level company. The night before he was supposed to start his new job, the executive called to say he was staying put. The board of directors at his current company--a major multinational retailer--had offered to name him CEO in one year's time.

I was aghast, but my former candidate could hardly envision a better scenario. He had leveraged an offer to run a mid-sized company and used it to land the coveted top spot at a retailing giant. No greater career coup exists, right?

Wrong.

After three tumultuous years as CEO, my former candidate was fired. This executive was not yet ready to run such a large organization. Had he accepted the job at the smaller company, he could have gained the necessary experience to successfully run a major multinational in due time.

Instead, he lured his company into a bidding war and forced the board to make a rash decision about retention in the name of corporate competition. As a result, his career ultimately suffered a mortal blow, not to mention the damage he caused shareholders, who watched their stock drop as a result of his inexperience.

Unable to land another CEO position, he took an early retirement.

In my 25 years of experience, I have learned that accepting a counter-offer is usually career suicide. Watching your boss scramble to keep you may be a heady experience, but in exchange for that sweet moment, you'll have squandered your honor, a sacrifice that will haunt you for many years. Even more troubling, you may never know exactly when or to what extent your reputation has been sullied.

There's a good chance hiring executives might blacklist you from other employment opportunities. Aside from refusing to ever hire you again, executives have long memories and will bad mouth you any chance they get.

I remember sitting on a plane with a group of retail executives when someone mentioned, by name, a seasoned retailer. The group listened intently as one of the executives launched into an unflattering tale of how the employee had used the executive's perfectly good job offer as a bargaining chip for a fat buyback. By being dishonest with one company, the employee harmed his reputation with all of the executives on that flight.

Whenever I deliver a short list for a top job to one of my clients, I feel obligated to mention which potential candidates have accepted buyback offers in the past. Often my client will choose not to proceed with one of these people. Remember: Recruiters never forget a buyback, and computer files help us immensely.

Bosses don't forget either. Initially, the company that retained you delights in winning you back from the competition. But after perhaps six months, management will begin resenting you for essentially extorting money or power from the firm.

A bitter taste of disloyalty lingers. Now you're tacitly expected to perform like a new hire, proving yourself all over again to justify your new salary or position. You had better be up to the task.

Anytime you use a new job offer as a bargaining chip with your boss, there's always a risk you'll lose the bet. Next thing you know, you're sitting in a strange office, having left a trail of ill will in your wake.

To be fair, counter-offers can provide an opportunity for employees to voice issues or concerns about their jobs. When you are recruited for another job, ask yourself: What are the pros and cons of my current position? If the negatives outweigh the positives, you simply must leave. However, you may decide you genuinely like your position, aside from one or two problems, in which case it's time to have an open, honest conversation with your boss--before you accept the offer.

Down the road, such a conversation will be far more valuable if you choose not to force your boss into a buyback offer. You will retain your reputation for honesty, and, in my experience, this will serves you far better than a single raise or promotion ever could.

Hal Reiter is chairman and CEO of Herbert Mines Associates, a senior-level executive search firm specializing in the retail, fashion, beauty and consumer products industries.

 

I completely disagree with this article.

Would this same article have been written if the guy had done a good job? Would it have been better to take the mid size job and live with regret over what could have been? Frankly, what a man decides to do with his life (after sweating and busting his balls to get to that position) is his choice and his alone.

Always be improving
 

This basically goes against everything I've been told. Should you also not network or accept a job obtained through friends or family because you wouldn't have been qualified to get the position without it?

I wonder how you made it 20 years on wall street without occasionally playing office politics. I also wonder how much farther you could have gotten if you had.

 

First, I didn't write the article. It pulled it from Forbes.

Second, The key point I took away, and the reason I posted it, is that once you accept a job at another firm..move on.

I don't agree with Hal's rationale having to do with the fact that the guy didn't do a good job as CEO. When you interview at other firms because you are unhappy with something about your current role, hopefully it isn't only money related, it is time to move on.

Unless you are a senior banker who is pissed that you didn't become an MD or a Vice Chair and you then get your title, most counter offers will try to keep you at the firm because you are needed at the time. Though, you have already shown your non-commitment to the firm and will be on the choppping block when the wind changes and layoffs come a callin.

You also don't want to burn bridges at the firm that made you the offer. If you are or are growing into an industry coverage banker, the world is too small.The other bankers will be across the table from you on transactionse

You should always be networking through family, friends, colleague, etc. to forward your career.

BTW - There is a big difference between playing office politics and setting yourself up for a fall.

Keep the nastiness out of these posts. I'm putting up articles and responding to help. If you are going to make assumptions about my career, etc. I can spend my time working.

Is this attitude typical of the Millennial generation?

Susan
 
monkeyc6:
First, I didn't write the article. It pulled it from Forbes.

Second, The key point I took away, and the reason I posted it, is that once you accept a job at another firm..move on.

You also don't want to burn bridges at the firm that made you the offer. If you are or are growing into an industry coverage banker, the world is too small.The other bankers will be across the table from you on transactions.

Keep the nastiness out of these posts. I'm putting up articles and responding to help. If you are going to make assumptions about my career, etc. I can spend my time working.

The problem with the article in my opinion is that it seems conveys the message that you should never leverage an offer to get a better one and it leaves little room for exceptions. Although it is almost always better not to renege on an offer, there are certain opportunities that you would be a fool to pass up on.

Also, this may be just a personal pet peeve but I find it incredibly annoying when people simply post an article like this without any of their own opinions attached to it. To me, this suggests you stand by it 100%.

I'm sorry if my post seemed disrespectful. I'm very blunt and assume most people here can take it, particularly those who are already in the industry. It was not meant to be a shot at you and I apologize if that's how it was interpreted.

 

Susan,

I'm sure having read WSO posts, you already know about the culture on this site and in posting, are prepared for it. And having worked in the industry, perhaps you know that the attitude, so to speak, is not limited to the Millennials-- For better or worse, it's not likely to change, though sometimes people get a little overzealous in their bravado. Compared to the other things I see on WSO, however, this probably isn't one of those times.

That said-- this article really confuses me and I'm not certain I agree with the premises either. Aside from the fact that its an article from someone in a completely different industry, where perhaps the standards are different, the author seems to be working under the assumption that the employee somehow forced their boss into giving them an offer. While performance in the role is the employee's responsibility, I believe whatever negative consequences of the promotion itself is going to fall, at least partially, on the employer, which is why they should be factoring in a host of considerations-- such as-- I don't know, whether the employee is really prepared for that promotion to begin with. don't know a single person in this industry (yet) who would let their employee force them into doing anything they didn't feel made sense. Obviously the boss in that article messed up and didn't have the best judgement here.

I'm just not sure a that expecting a sullied reputation, as the author put it, is realistic or the norm in these circumstances. Could you give us a finance-related example of this happening? It seems curious that the thread's title would essentially tell people to never take a counter-offer regardless of industry, group, situation. Rather, if you have any inkling that you may want to leave for something else, you should just leave regardless of whether you're on the fence or not or face the wrath of shame and ruined reputations. Seems silly.

How did the recruiter know the employee's boss simply hadn't offered it? I don't know where this arm-twisting notion is coming from. If I'm on the fence about whether to go and stay, and look out into the industry to see if I find something else, and am still on the fence, I should have the right to go to my boss to see what he thinks about it and start a dialogue. Maybe he tries to get me to stay, maybe he doesn't. But a sullied reputation as a result if he does? Come on. Help me understand this.

I don't understand how receiving a counter-offer makes a person dishonest, either. This hasn't happened to me yet as I'm still relatively new to the industry, but if I take an offer elsewhere, go in expecting to tell my boss I'm leaving, and I'm unexpectedly offered a sweeter deal that ameliorates at least some of the reasons why I thought about going elsewhere in the first place, how does that make me dishonest, and given a recruiter wouldn't realistically know that my intentions going into that meeting aren't benevolent, why would the default assumption be that my intentions are malevolent?

The author sounds biased and sounds like he hasn't looked at it from all the angles. And a little bitter for reasons unbeknownst to me. I know the fashion industry is a lot more high-strung and sensitive than banking is, and perhaps that's a part of it? But I just don't agree with some of the assertions made here, unless I'm seriously missing something. I don't mean to ask loaded questions, I'm just genuinely confused and a little taken aback. Any insight you could provide would be great.

 
monkeyc6:
This executive was not yet ready to run such a large organization.
I don't think the relevant issue is counter offers. I think it's more along the lines of "executive not ready to sit at the big kids table".

Nice article though, thanks, it did get me thinking!

Get busy living
 

I wasn't aware that people generally add their opinions to articles they post. Thanks for letting me know.

Please know that your bluntness came off as bravado. As you grow more senior in the Industry, I hope that you stand on your achievements and leave your ego in the dust.

Full disclosure: I left the Street to become an IB Executive Recruiter. I don't work on many junior level assignments, but post the analyst roles on this site.

I work with many of the MDs who were my former colleagues. Most dropped their "ahole" attitudes years ago.

Thanks for the apology.

Susan
 

10-15% increase from AVP to VP seems pretty low. If you were looking to leave because you didn't like the job, culture, team, etc then you should definitely not take the counter. But if it was mostly pay then obviously take the counter off.

Have you told the first offer that your current job countered with a much higher offer?

 

not yet, the conuter offer is just materializing and will be in writing shortly. I'm thinking I should probably tell my recruiter this but I already verbally agreed to the new firm's offer and I have a paper copy sitting in front of me (haven't signed). I also think the new firm think 10-15% is a good increase because they're somehow doing me a favor by promoting me. Any advice appreciated here.

 
commoditiesplayer:

not yet, the conuter offer is just materializing and will be in writing shortly. I'm thinking I should probably tell my recruiter this but I already verbally agreed to the new firm's offer and I have a paper copy sitting in front of me (haven't signed). I also think the new firm think 10-15% is a good increase because they're somehow doing me a favor by promoting me. Any advice appreciated here.

Here's the most important part of this all...why did you go out and get the offer in the first place? What was your motivation? Money? Title? Etc.

 
Best Response

I wouldn't tell the new firm/recruiter until you're absolutely certain your current firm is going to go through with it. Once you have that in hand and if you really want to play it, you could bring that number to the new firm and see if they'll match or beat it. But you'll probably never be able to use that headhunter or go to the new bank again and depending on how well connected everyone is and how small of a space you work in you could be damage your rep.

Like others have mentioned take into consideration why you considered leaving your current job. Was it purely money? Do you not like some aspect of your firm/job/coworkers/bosses? If it's the former and you'll be making more at your current firm with the new title it seems like your question is answered. If it's the latter, is the pay increase enough to put up with a shitty boss and workplace, for example?

Keep in mind also that a crappy pay raise of 10-15% but including a new title is a classic negotiating tactic for employers (I've been on that side of the table for a while). A new title costs a firm nothing. More pay does. And some people see a new title and discount the comp.

 

Thanks, really appreciate the response. I applied because I was reached out by the recruiter of the company; and to be honest, I wasn't expecting to receive an offer as I didn't feel I did too hot in the interview. But I did receive an offer.

 

Tell your current/former VP what your offer (comp, title, benefits, vacation, etc) is at the new company and see if they'll match or beat it. It would be shitty to rescind on the new company but sometimes you have to do what you think will make you happy and is the best career path for you. The 3 layoffs in 3 years at the new place would make me nervous. LIFO for the next round of cuts.

 

Honestly, it depends on your relationship with management. There's a moral conflict with leveraging a different offer, that you've accepted, to get a raise at your current job. As long as your relationship with your management team is strong / personable, like you said, I don't see a problem with having them match or +1 your offer. If there's going to be any hint of resentment / you feel like anything's going to change, definitely take that into consideration.

@"Dingdong08"'s comment is correct, on a LIFO basis you'd be fucked. And 3 layoffs in 3 years is brutal. Plus, if they haven't done well in this economy the past 3 years, what makes you think they'll do well over the next 3 years? At the end of the day, they'd drop you fast if you messed up, so don't feel bad about rescinding.

 

Thanks @"CorpFinanceGuy", this makes me feel a little easier. I should note that this company is 2x the size of my current company ($2B vs. $4B) but in a down-trending industry (rev decline, EBITDA decline). Regarding my relationship, I'm close with the VP as he trusts me (when 2 sr managers left, I took up their responsibilities) and told him I was not expecting this new offer.

 

If your current place matches or makes it worth it for you to stay, then stay. Don't negotiate, but lay out the offer honestly, your reasons, and see what they do. If they match, then I would stay no matter what the new company counters, if anything. The devil that you know is always better, at least in my opinion.

GTAA Mistmaker
 

Sounds like you are in a good situation and that you didn't know what you were getting into by applying elsewhere, didn't expect an offer, and saw the $$ and couldn't say no to it. Like others have said, if your current firm is willing to match it then it sounds like you should stay, I wouldn't think twice about going back on the new firm.

This to all my hatin' folks seeing me getting guac right now..
 

Thanks @"Cruncharoo", you said exactly what I was thinking in my head.

I truly didn't expect an offer as I thought I didn't do so hot in the interview. But it's also a title bump...and wonder if my current company could match that. To not make it awkward for the team, would something like this be okay: Match pay close to offer received, but promote to Manager retroactive during next promotion cycle?

 

Thanks again @"Cruncharoo" and @"CivilServant".

I had a heart to heart with my VP last night, and told him what I was offered at the other company. He indicated that what I was offered in terms of pay at the new company was very enticing, and that he would not be able to match it 1:1 but could certainly raise my current salary. He also indicated there's no hard feelings as he understands my situation and wants me to do what I feel is best. He is supposed to get back to me today with a figure.

 

Figured I would keep you guys posted, especially for the advice and suggestions provided (much appreciated btw). I've decided to go ahead and accept the new offer. It just doesnt feel right to accept a counter offer and screw over my colleagues. I made a commitment to move on, and I will honor it.

 

Sounds like you are in the driver seat! Congrats on that. Personally, I will say that the grass isn't always greener on the other side. I chose to leave a bank I was working with for a big name brokerage and it was one of the worst mistakes of my life. If you are happy where you are, intrigued by the business model and have job security, pending they will compete with your current offer then staying might be the right thing. You have to make the choice at the end of the day. Good Luck

 

Thanks! I actually had a heart to heart with my boss, and have decided to stay. The massive layoffs at the other company plus the negative glassdoor reviews made me feel extremely nervous of leaving my current firm.

 

First of all congrats on the offer, seems like you definitely went one way vs. another in terms of what you are wanting to do. After chatting with your VP and getting his counter did you tell him you were still going to accept the new offer or said you will sit on it? Reason I ask is hopefully they dont see you saying "I'm leaving, no I'm staying, no I'm leqving" as that will make you look indecisive.

Honestly its great that you have that kind of access to management in your company and have built a relationship with them, that should get you far as far as moving up goes. What was the ultimate counter-offer you ended up settling on?

Also would you mind telling us a bit about the industry your company is in any any color on your day to day. You should consider doing an AMA it would be great for monkeys to hear about experience/upward mobility, etc. at a smaller meritocratic corp. fin position and how experience would compare to F100.

 

If you have to relocate, those costs should weigh into your decision. Both fiscal and non.

Given your working relationship with upper management where you are, I'd recommend staying if they can give you a sizeable bump. Having favor with those types of influential people in the company can work wonders later on down the road.

Plus there's you enjoying the business model of where you are.

Happiness and especially potential in the future is very important when you're in your 20s. But I wouldn't stress either way, lots of people boomerang back to a company and group they were in good relations with. Both decisions are good decisions.

 

you made the right choice

it's bad form to accept an outside offer, and THEN negotiate for something better at your existing employer. you've already signaled that you're a jumper, and they'll remember that come next layoff or promotion.

conversely, you've left on good terms and made a rational decision in their eyes. sounds like you can always come back to this place. if you do come back, it will be easier to justify to whoever they report to that you're worth more, because this time you're being hired externally with a higher incoming title and salary (versus being promoted to stay in your situation -- it's just politically harder to do so).

 

Update: It's been about 2 weeks since I accepted a counter, but I wanted to provide an update to this group as I know this has been an informative thread for others.

So, after accepting a counter, I figured things would return to normal. However, as a few mentioned here of the consequences of accepting a counter, I feel like I'm starting to feel those negative impacts after only 2 weeks. I've been receiving questions from my boss and VP if I'm settled (e.g. VP asked if I regret my choice). This has happened more than a few times, and I'm tired of it. And to add further damage, another colleague of mine (Manager) just put his 2 weeks notice in.

I thought about the decision I made to reject the new offer, and in hindsight, I put way too much emphasis on layoffs because the layoffs were not occurring at the Finance level (think layoffs akin to what you would normally see at F500 companies). I also didn't appreciate how the VP treated one of my key mentors (Director) in the group (e.g. VP asked good director why he didn't tell him I was leaving, among other things).

Additionally, I couldn't sleep knowing I just gave up a great opportunity with a big, brand name company WITH larger pay and title bump. Because of this and the comments I laid out above...I decided to contact them back with a genuine email that I made a mistake. I figured, what do I have to lose? And to my surprise...they've reconsidered and are excited!

It's been a rollercoaster to say the least. I'm fully aware that my current VP/boss will be extremely angry and pissed when I issue my notice (again), but it's the choice I've made and need to take. So yeah, figured you guys might enjoy this new update. Thanks again for all the comments, it's helped a ton.

 

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