Is a Counter Offer Just a Poisoned Apple?

As a recruitment consultant, it was that day you were so patiently waiting for. After all it was a well-deserved moment of celebration.

The candidate was supposed to join your client from today. You had already planned what you would do with the princely sum of money you would bill on the client. And then the candidate backed out.

He called up and informed that his present employer has matched the raise and also promoted him. So he has chosen to stay back in his comfort zone

The house of dreams falls like the pack of cards.

More than the 8.33%, it’s the client’s rebuke – “Your candidate backed out, Sonia” (as if he was born and brought up under my supervision and value system)

“According to the National Employment Association, 80 percent of employees who decide to accept a counteroffer are no longer with the company six months later”

Any talk on counter offers by a recruitment professional like cajobportal.com smacks of an inherent conflict of interest. Thus you wonder whether to take words at face value 🙂

Let us take a look at why employer extend a counter offer in the first place.

So let us analyse the contours of accepting a counter offer and staying back

Et tu, Brute- The Fidelity Risk

And you also, Brutus. Usually the last words of Ceasar when he saw his good buddy Brutus among his murderers.

This perspective talks about whether the relationship would ever remain the same. Or would the employee always remain a traitor in the realms of the company.

 

 

When an employee tenders a resignation, an astute manager will ask,

‘What are they offering you?\’

At this point, the auction process begins.

The question ceases to be one of career development and becomes one of material enticement.\”

Let’s consider this

Sumit always complained that his role as an Associate Director in this marquee investment bank wasn’t appreciated. Although he generated sizeable revenues, he missed the promotion bus this cycle and probably the same would happen even in the next month.

His disgruntled voices reached competition and they invited him to discuss a ‘Director’ designation along with substantial pay rise.  Out of “loyalty” to the head of his team, he informed them of the offer and let them know that he would be leaving soon.

The senior staff of his company went into overdrive with the goal of preventing Sumit from leaving.  The APAC Head along with his team told him that he was a rising star, they planned to promote him to ‘Director’ that they would match the counter offer. They warned him of problems at competition and the risk he took that he could be a LIFO (Last In First Out) layoff.   They appealed to his loyalty and convinced him that he would be foolish to leave. So Sumit turned down the offer.

Later that year, when the financial crisis ensured, revenues fell short of expectations and the Board insisted on layoffs, Sumit got the first “pink slip.” It was an easy decision. He had been disloyal.

The illustration above may have been more fiction than fact but certainly not an unfounded one. Typically, the disloyal employee misses out on promotions, larger bonuses or other opportunities.

The Showtime television series Billions actually used this type of scenario in Episode 3, “Yum Time.”  The career counsellor Wendy who works at Axe Capital learns from the COO that a key portfolio manager- Maria Saldana has received a job offer from another fund. 

“Her P&L is always green,” says Wags, talking about Axe portfolio manager Maria Saldana. P&L = profit and loss; green = she’s making a profit.

Speaking of the Saldana conversation, Wags says she was a “bastard” about her bonus because she used a counter-offer from a competing firm to get more money from Axe Capital. Wendy points out that male traders renegotiate; Wags claims that if they try to do it like Salanda did it, they’d be fired.

The COO was so angry about her disloyalty that he planned to make her a counter offer and then prevent her from getting and using information that she needed to make investment decisions.  Without information, the portfolio manager wouldn’t be able to invest effectively and would fail to reach the returns needed to get her improved package.  She would eventually be forced to leave and would no longer have her strong track record. 

Although that was also a fictional story, it did not come from Andrew Ross Sorkin’s imagination.  It was likely based on stories he had heard.

Let\’s face it. If you accept the counter-offer and stay, you\’ll always be viewed differently

1. Even if you accept a counteroffer, from this day on, your loyalty will always be in question
2. When promotion time comes, the company will remember who is loyal and who is not
3. When times get tough, your employer will begin the cutbacks with you

When someone quits, it\’ often a direct reflection on the boss. Unless you\’re really incompetent or a disrupting thorn in the boss\’s side, he might look bad by \”allowing\” you to go. The gut reaction is to do what\’s necessary to keep you from leaving until it\’s convenient.

That\’s human nature, too.

If you accept the counter-offer and stay, you\’ll always be viewed differently. In essence, by agreeing to stay, you\’ve \”blackmailed\” your boss. From now on, he or she will consider you a \”fidelity risk.\” You lose your status as a team player. You\’re no longer viewed as an insider.

A tiger can’t change its stripes

If there are fundamentally flaws in the organisation’s culture, what would happen when a senior who fought it ‘tooth and nail’ to prevent someone from leaving, himself leaves? Without the Godfather, you will be left at the mercy of your immediate boss.

You are setting yourself up for microscopic scrutiny for EVERYTHING you do.

Whatever it was, try to recall why you decided to find a new job in the first place. Does this ‘thing’ still make your blood boil?

The same circumstances that now cause you to consider a change will repeat themselves in the future.

Will your bolstered pay packet improve the unfriendly work environment, make unmanageable workloads manageable or suddenly create progression where previously there was none? Unlikely.

If they just promise you to \’change\’ what hasn\’t changed for years they simply won\’t do it. Company procrastination and organization inertia do exist. And they are stronger than individuals. If there are reasons to leave, leave.

Insult to your intelligence and a blow to your personal pride: you were bought

A counteroffer can be a nice ego-boost — particularly if you felt underappreciated in the past. And it likely feels a little vindicating as well, as though your company might finally be ready to deliver the salary you deserve and the respect to match it.

However ask yourself, \”If there were grand plans for you in your current firm, it should not have taken an outside offer for you to find out.\”

The question one should ask their employer when considering a counter offer is this: \”Why wasn\’t I this valuable to you yesterday?\”

Once you have been seen \”sleeping with the enemy\” you will never ever fully regain the trust of your leader, colleagues etc. This would be detrimental for your mental peace on the work front, notwithstanding the collateral damage to career prospects.

Money is important, to be sure. But more money will not equal more learning or more happiness — and you will soon remember that if you decide to stay.

 

Summing Up

In the turbulent times that we are in, talent acquisition and retention has become one of the most crucial challenges for corporates. There is probably no ‘one size fits all’ answer here.

Maybe one needs to deliberate on “Why am I leaving? And “Why did I choose to stay back?”

Whether it was

1. A counteroffer of additional responsibility, change of location, job security, line manager style, company culture, opportunities to advance
2. A counteroffer of more money

The former will certainly need to be analysed only on a ‘case to case’ basis, Money isn’t everything and it pays (excuse the pun), to remember that.

But certainly, people who enter a job search with the idea that they\’ll get a counter-offer and stay put deserve the fate that awaits them

With Machiavellian motivations at play, counter-offers of ‘more money’ are more often than not just a ‘Band-Aid’ on the situation. They will certainly turn out to be ’poisoned apples’