On Counter Offers

http://jasonpunyon.github.com/blog/2012/05/17/on-counter-offers/

by JasonPunyon • 14 years ago

80 64 14 years ago

jasonpunyon.github.com

fatjokes• 14 years ago

Congrats on your job and all, but I don't think a counter-offer with a raise should be taken as the action of a "skeezy jerk." It sounds like a reasonable reaction to losing a good employee.

Financial considerations are a significant part of a lot of peoples' reasons for working where they do. Some may even use job offers as bargaining tactics. If you were working at a hedge fund, obviously finances are at least part of your motive. So perhaps your boss merely sought to play to that.

mattdeboard2• 14 years ago

Yeah I mean, in 5 years are you going to want people to find this blog post where you're shitting on your former employer for valuing your presence at their company? Valuing it so much that they offered to double your salary?

Maybe they are skeezy jerks, I dunno. Those kinds of people do exist in the world, but it's pretty tacky flaming them in public.

famousactress3• 14 years ago

you're shitting on your former employer for valuing your presence at their company?

Fuck no. Nice try. They didn't value his presence at their company. They valued the reversal of his decision to depart.

If they valued his presence they would have been paying him what they thought he was worth (or maybe even considered other factors that made them so different from the new gig in his mind).

famousactress3• 14 years ago

I disagree that it's at all reasonable.

The only reason to make a counter offer is because at least one of the (major) reasons an employee is leaving is money (and that's basically never the reason). People leave because it's not a fit. Money isn't going to make it a fit, so as a manager giving a counter-offer, if you know what you're doing.. you're buying time. Hoping the employee will take the offer and you'll figure out how to make them less important to you over the next N months. That's skeezy. Otherwise you don't know any better. You're a shitty manager and you're out of touch. It doesn't occur to you that you already have a team where your best is leaving, and now you'll spend the next N months making your best even more bummed out and less productive (especially since they're suddenly in the position of realizing how much leverage they have with you).

The whole thing is sad and terrible. If you're a manager and this happens, let it. Then turn around and figure out what your remaining employees need to be happy and fulfilled.

potatolicious2• 14 years ago

> "Money isn't going to make it a fit"

But yet, for many people, it does. In the grand scheme of all programmers (or any profession, for that matter), only a minority are doing it for the sheer passion of it. Most people are in it for the paycheck, and if they can get a larger paycheck without taking a substantially worse job... That's a sweet deal.

soup10• 14 years ago

It's interesting how money clouds people's judgements. I don't see the counter-offer as offensive, I would take it as a compliment that they really wanted to keep you(of course it stings to know that you were probably underpaying you while you were there, but that's how businesses work they pay you just as much as your worth).

Also, you should always negotiate when you get a job offer. Remember the employer has tons of expenses to have you there and a few thousand more per year is relatively little to them, but significant to you, the worst they can tell you is that's the best they can offer. Any employer that would take offense at an attempt to negotiate is not worth working for.

potatolicious2• 14 years ago

I feel like the author has severely overreacted here.

Counteroffers are a fact of daily life with most corporations, there's nothing malicious nor personal about them. A ludicrous counter-offer means the company has severe managerial issues and has allowed someone to become absolutely, non-negotiably indispensable.

IMO perceiving the counteroffer as "buying off his dreams" is a huge overreaction, and in my various jobs has never been a malicious move. Your boss is trying to save his bacon, not destroy your dreams.

The author does nail one point, but for the wrong reasons:

> "So some of these offers are just plain “keep them in the building while we find a replacement who’ll do the job at the price we were paying.”"

That's exactly what these counteroffers are. Very few counteroffers are serious counteroffers (serious as in they will keep you on indefinitely at the new salary). Management is going "oh fuck, how did we let this guy become so critical" right now, and as soon as the immediate crisis of you leaving is gone, they will attempt to replace you. You'll be out on your ass as soon as they find/train that someone.

I've had this exact thing confirmed by multiple HR folks I've known, all off the record of course. They admit that they explicitly get asked by management to organize a "manage-out". Hell, this sort of thing is bog-standard for most large HR departments.

> " Companies don’t just allow their managers to get slapped around and make outrageous counter offers to people. Budgets and HR minions can’t stand that. The manager gets dinged by the higher ups because she’s “lost control”."

This seems like where the author is off the mark. In my experience no HR person nor upper-management exec has to chase your boss down to push you out. Your boss already has every intention to manage you out as soon as he drops the counteroffer on the table. Especially when the offer is 2x your salary.

delinka• 14 years ago

If you get a ludicrous counteroffer, it's probably the perfect time to also get a severance package if you don't have one or get an increase in severance if you do.

joezydeco3• 14 years ago

Wow, I never thought of that.

I'm heading for a situation that will most definitely result in a counter-offer and my thoughts were to ask for an employment contract to lock in my time and terms so I don't get backstabbed a few months later. But my problem was how to generate and finish the contract before losing one (or both) jobs.

Severance seems a lot easier to get in place and locked in. Does anyone else have experience with this?

jwilliams• 14 years ago

It's a little tangential to your comment, but I wanted to pick up on one piece.

A ludicrous counter-offer means the company has severe managerial issues and has allowed someone to become absolutely, non-negotiably indispensable.

I don't think it's always managerial issues. Sometimes people are just, well, good.

There is a problem underlying this -- as a result of this managerial "flight risk", many companies in turn decide to regard their employees to be replaceable parts. So they get obsessed with CMM, over-the-top documentation and 'repeatable processes'.

Sometimes someone is indispensable (rarely truly indispensable) because you've let knowledge pool in one person; where is shouldn't. Sometimes it's because your employee is a superstar. It's really important to recognise the difference.

Most of the time companies will assign this person to train others. Works some of the time, except when they're a superstar, in which case it just accelerates their exit.

toyg2• 14 years ago

> Very few counteroffers are serious counteroffers (serious as in they will keep you on indefinitely at the new salary).

Hell, I bet most of these don't even get honoured. "You understand, we need to get budget, some bureaucracy, but don't you worry, we'll sort it out asap!"... weeks pass, the new money is not coming ("eh, we had some problems, but don't you worry..."), and eventually you get kicked out. Meanwhile, your original offer has probably expired.

Never accept counter-offers.

jrockway2• 14 years ago

Offers for programmers don't expire, unless someone magically made a bunch of new programmers overnight.

And to avoid the situation described in the first paragraph, you get the counteroffer in writing, of course. I know people that ended up doing 2 to 3 iterations of counteroffers. It worked out fine for them.

zaptheimpaler• 14 years ago

>That's exactly what these counteroffers are. Very few counteroffers are serious counteroffers (serious as in they will keep you on indefinitely at the new salary).

Is it possible to negotiate a contract for the time period in which they will pay you the new salary and a renewed contract for the old (or higher but reasonable) salary? So you know how long you can stick around and get 2X the money if you want to, and the renewed contract tells you whether they intend on getting rid if you. (I don't have any experience with this, so I'd love to hear others thoughts)

pcopley2• 14 years ago

I had almost this exactly situation happen a few years back. I was leaving a decent position for another decent position because it was closer to what I wanted to do with regard to the projects I'd be working on and was paying about 15% more.

I hand in my letter of resignation, boss thinks it over for a bit before offering me a 30% raise. I respectfully decline and start to leave before she doubles the raise.

This is where I had to think about it - I wasn't leaving for my dream job or anything, just another 9-5, and here I was with 4x the difference on the table. I said if she could have me a 3-year employment contract by the end of the day I'd sign it at the agreed salary, which is when she immediately started hedging about needing to talk to the attorneys and the owners, etc.

TL;DR - Counter offers are bunk.

jarjoura• 14 years ago

On the one hand it's an ego boost to feel they want me to stay. "Okay, I must be doing something right."

On the other hand, I'd be more insulted that they think I'm actually worth 2x what they are paying me now, but weren't.

Ultimately, I think you did just fine following your dreams. Good luck! :-)

chaostheory3• 14 years ago

> This counter offer reeked of skeeze. He was trying to buy my dreams from me. When someone tells you “I’ve been given the opportunity to live my dreams, I’m leaving” the decent human thing to do is to congratulate them and send them on their way. (With a security escort out the building, of course. You dont know what these dream heads are gonna do on the way out.) What you don’t do is tell them you think so little of them, their lives and their goals that you think can buy them off.

Personally I don't feel that they meant any disrespect. They're just desperate to keep you longer. It is hard to find good developers.

rhizome• 14 years ago

Personally, I don't think it was a real offer. He was just trying to see what the reaction would be.

chaostheory3• 14 years ago

This may be true, though unless I misread his old company is in finance. Based on my experience, it's really hard to find good developers in this area.

swang• 14 years ago

It is a sign of disrespect. If they actually thought of the author as a good developer or good <whatever X> position is, they would have already paid him the 2X salary increase beforehand, or at the very least not gone to war over what the author calls a "pittance" of a raise relative to what he was earning.

While it's true that they're desperate to keep him longer, it's because they're trying to stall, not because they think its a good developer.

chaostheory3• 14 years ago

It depends on how large the company is. A big large corporation has a lot of protocol and rules for determining raises.

At some of the past places I've worked, the best raise you can get is 10%.

> While it's true that they're desperate to keep him longer, it's because they're trying to stall

This is most likely true.

Based on the anger in his post, I'm guessing the real wrong was done in the past. It didn't seem like he was treated well. I still don't see the counter offer as bad. If anything it's flattering.

jonamato• 14 years ago

Counteroffers get made all the time - I've had at least 3 made to me in the past, including one for an interdepartmental transfer within the same company (!) Accepting a counteroffer is staggeringly stupid for a number of reasons, but I just can't comprehend why the author would get so offended that one was made in the first place. Answer "no" and move on, easy.

K2h• 14 years ago

this happen all the time. if employee accepts more money to stay, the company is given time to backfill the position, and in the best case for the company, this employee can train their replacement... probably without knowing it.

if you accept such an offer to stay, the company knows it is about money, and that you are a flight risk because as soon as a better job comes along you will be gone. the funny thing is, most everyone would leave for a better job, but by going through this back and forth you will now have a target on you (company now realizes how critcal you are to the busness and will work harder to cross train)

I have seen this from both sides, and the author made the correct decision to walk in my opinion.

if some project needs finishing, negotiate a part time contractor stint, if you feel really really nice.

tehjonz2• 14 years ago

Counter offers are a way for the company to buy time while they find your replacement. Why not pay 2X if it means keeping things running smoothly? It's still a LOT less than the actual impact of your departure on the business.

Counter offers never work out in the long term. Now that you've put in your notice, you're no longer seen as loyal. Therefore, had you accepted (bad idea) they would not have kept you around any longer than absolutely necessary.

Even so, trashing your former employer after they offer you more money, however self-serving, is bad business.

I would not hire somebody if I saw them bad mouthing a former employer. What if they don't like my company? When they leave, they're going blast my business for not recognizing their genius/value/divinity earlier? Not good.

ianthehenry• 14 years ago

Nowhere in the article does he mention who his former employer is. He vaguely implies that it's a hedge fund, but there's more than one of those. This isn't an article lambasting a particular company; it's about counter-offers in general.

davidcuddeback• 14 years ago

Maybe he doesn't say it directly in the article, but look at the page title to get his name (Jason Punyon) and then search for his LinkedIn profile (http://www.linkedin.com/pub/jason-punyon/13/396/a89) and you can be reasonably confident that he's talking about DKR. That's not very anonymous.

tehjonz2• 14 years ago

Nope. It's totally irresponsible. Given the power of the internet and the ease by which information spreads, the real potential is there. And even then, it makes no difference.

Publicly (or to their face) calling a former employer "sleazy" is very, very unprofessional. It demonstrates poor taste and lack of restraint. And ultimately, self-importance.

"How dare they not recognize that their pathetic company is NOT my dream job? How dare they offer me money to continue to support their petty operation?"

Are you people even serious in defending this?

mag487• 14 years ago

I agree with the author that getting a ridiculously generous counter offer is a red flag about the company's management, and this alone constitutes a reason to reject the proposal. However, his moral indignation at the thought of being paid more to defer work on an activity he cares more about is misplaced. It's silly to frame the negotiation as the company intentionally trying to "buy off his dreams." Most people have a variety of "dreams," many of which can be better achieved by having more money. As far as the company knows, doubling the author's salary could let him achieve the alternate dreams of getting out of debt or buying the house he's always wanted.

Raiderrobert• 14 years ago

Didn't read through the comments very thoroughly, but I saw someone mentioned that companies use counter offers to get employees to stay around just long enough for them to find the replacement and then fire them.

It sounds silly. It sounds paranoid. It sounds like something out of a cheap novel. But I have done research for an executive recruiter for over two years as a side job, and the statistic he quotes me is this: "Within 6 months the person who accepts a counter-offer is gone."

The reasons are many for why that is. It's not always the sleaze bag just trying to buy uninterrupted productivity. Often, the person is like the original writer said: absolutely miserable.

Regardless never accept counter offers. Ever.

SoftwareMaven2• 14 years ago

As a manager, I will almost never make a counter offer. If somebody has gotten to the point of a job offer elsewhere, their head will be out of the game. While money may have started the job hunt, as time has gone on, they've found a dozen other things that are driving them crazy. Those don't go away with the counter offer and will eat away at them until they wind up leaving anyway (with poor performance in the meantime).

The only time I'll consider a counter offer is if 1) the engineer really is good and 2) they don't really want to leave. It's a judgement call and I've only chased somebody once (successfully, I might add).

viscanti• 14 years ago

The vast majority of talented engineers will make a counter offer, and will have multiple offers. The idea of passing on someone talented because her "head is out of the game" is silly. Unless you're working on a fantastically interesting problem area, I'd question the level of talent you're getting with those methods (but not all companies need a high level of talent, so you may be finding perfect fits for all I know).

manmal• 14 years ago

If there really are so many things that drive employees crazy, then something's wrong anyway. There are many people who don't complain about stuff in the open, but get fed up more and more until they just quit - perhaps without telling you the reasons at all. Apart from such peoples' quirks, culture often discourages criticism for all employees. There are many possibilities to avoid such situations, but the one I like best is described in Tony Hsieh's book about Zappos: a public culture book which is basically a report on what goes good and wrong in the company. It's foolish to believe that people most often leave for the money - I'm quite sure that 50-80% of quittings are due to crappy culture and its consequences (e.g., too small monitors :)).

SoftwareMaven2• 14 years ago

There may really be something wrong culturally (I try hard to prevent that, but some things are out of my control), but, especially when there isn't, people feel the need to have a reason to leave, a reason to bail on a project, potentially causing extra stress to people they like.

To assuage these feelings of guilt, people start identifying and magnifying things that would never have bothered them otherwise (such as "why does management only value me when I threaten to quit?"). Once those seeds are planted, it is a steady progression towards exit from the company. I'd rather the engineer take the new job and find somebody who is excited about my opportunity.

There are no absolutes in management, though. Like I said, I have chased somebody back into the company who was in his last days with an accepted offer elsewhere.

The real key is to make it so your toxic employees want to leave and your fertile employees have no desire to answer te headhunter call.

gcp• 14 years ago

As a manager, I will almost never make a counter offer. If somebody has gotten to the point of a job offer elsewhere, their head will be out of the game.

This isn't necessarily true. You can get headhunted and receive offers for similar jobs at significantly higher pay. In these cases counter-offers make perfect sense for both sides.

mkramlich• 14 years ago

Offering to pay 2X is probably a bad sign. Because it means they think you'd be worth that. But they weren't already paying you that. Which means they were underpaying you before. Which is not nice.

jrockway2• 14 years ago

Your market value is what someone will pay you. Before you had the offer, you were worth what your job was paying you. Now, after the offer, you're worth more. Simple economics.

praptak• 14 years ago

"Simple economics" is an oxymoron. Theory of value goes far beyond the market price as the final judgement of value.

On even a higher level, economics just describes possible outcomes of a game under a set of rules. It does not prevent us from using our own judgement of fairness on the rules themselves.

orbitingpluto• 14 years ago

I'm the proud recipient of getting that 2X raise, but not until I gave two weeks notice. (Former attempts to get a raise resulted in regular 0% increases.)

I agreed to stay for four months more. I knew a 2X raise couldn't win against my psyche forever. But it was nice to finally get that formal sign of acknowledgment.

(Former signs of acknowledgment - aka monetary bonuses - sat in my direct manager's desk. He never felt the need to pass it on until it became apparent to myself and the person who directed it that I had not yet received it.)

I don't know about the skeeziness of the writer's boss, but my mine sure was!

focusaurus• 14 years ago

So here's a question. If one was satisfied/interested/liked/whatever their current job, but thought they were truly earning significantly more than their salary, is there any good tactic to start the discussion with management (or drop hints or whatever) without dropping the "I've taken another job" bomb, which as many point out is pretty much the end of the relationship right there?

In my own experience, I've gotten a large "retention bonus" after many of my peers quit. However, this was just dropped on me without any request or action on my part. It was a preemptive "oh God please stay at least until date X", but I didn't have anything to do with causing it directly. It was just smart/panicked managers buying insurance. And it worked. I happily stayed as I wasn't quite to the point of being ready to leave yet, so I stayed till that date and then through the next end of year bonus and then gave notice Jan 2.

jreeve• 14 years ago

Just being honest has worked for me.

I'm a freelancer, and over the last couple of years I've transitioned over several positions. It is much easier to negotiate a new salary when you have a job offer in hand, though I've never taken a counter offer.

It helps to know that there is usually a large-ish cost in acquiring a new hire that most folks want to avoid... and that just because you have a job offer from someone else you don't necessarily have to take it.

The last two clients I worked with were quite flattered when I asked for a counter offer, though because a) I'm still kind of new as a developer and b) it's my second career neither of these folks were paying half what my new offer was neither could really match the newer offer.

Perhaps it would be different if I were a w2 employee (and I believe that I only have one or two more transitions to make before I top out at what I can effectively earn, though I am quite good at what I do).... but having a job offer in hand doesn't mean that you can't or shouldn't specifically ask your current employers to make a counter offer.

furyofantares• 14 years ago

It's possible the 2x offer wasn't really that ludicrous. Any time in my career when I have felt I was paid more than could be considered reasonable I have been proven very, very wrong. I think our culture of hidden salaries combined with savvy hiring and compensation practices make it very difficult for a person to understand how much value they provide and how much it costs to replace them.

Also consider that there are companies that are always hiring developers. They aren't filling roles, they are just looking to hire anyone capable that they can. Of course their demand is actually finite but reaching it in the current market is inconceivable. These companies can afford to pay whatever value you add, salary is dictated only by their demand for good engineers because it dwarfs the supply. Good engineers aren't actually replaceable for these companies, if they could find a replacement they would want to retain both.

codeonfire• 14 years ago

A good policy is to never take a counter offer for the reasons described in the article. However, there's no harm in coming back in a couple years at that 2x salary and a promotion.

Tyrannosaurs• 14 years ago

I was chatting to a recruitment consultant a while back (we were hiring rather than my looking) and they were saying that something like 90% of people who accept a counter offer leave within a year. If you're unhappy somewhere unless money is the reason you're unhappy, a counter offer (assuming as most are it's just financial) isn't going to change that.

The only way you should consider a counter offer is if it really addresses the reasons you're looking to leave and you really believe that they'll deliver on it.

Tichy• 14 years ago

Don't sell your dreams - OK. But really, your dream is some job at some company (even if it is touched by Joel)? I hope you are not in for some big disappointment a few years down the road.

markokocic• 14 years ago

As long as offering counter offers provokes a mixed feelings (as shown in this very HN thread) it is a valid strategy to try in order to keep employee until they find/train a replacement.

drx• 14 years ago

If I were Joel, I'd be proud someone rejected a 2x raise to work for me.

miahi• 14 years ago

That 2x could be lower than what Joel would pay.

erikb• 14 years ago

I never thought about counter offers as "buying my dreams off". For your managers you are probably mainly a resource like the computer you are working on and the coffee machine in the kitchen. For them you are a machine that eats "benjamins" and spits out code. If the code you spit out is good they are willing to feed more "benjamins" and if it's not they throw you away. They don't care about the dreams their printer might have, why should they care about yours?

I think you should understand yourself in this way and you will see that there are also a lot of options for you.

I mean, if you are good enough, that Joel wants to hire you and your old boss offers you 2 times your old salary (I never even heard about such an offer), you must be good enough that most companies want you. So you can still work for Joel later on. You might also be able to work for Google or Facebook (applying would be worth find out about that, wouldn't it?). You can tell your old boss your requirements for your dreamjob and you can ask Joel for the same number on your first paycheck.

My point is, you don't have two options: "money" or "dream". You have a wide range between them and can find out how much you can get of both. Be more flexible, Jason!

Newguy123• 14 years ago

The job of management is to get the job done at the least cost. It is a little drama queenish to call that sleazy - it's the way job is done.

I have moved in the past for more money - and I have never been worried about finding another job. I also have a huge history/legacy in the past company. I would have gladly stayed if they gave 2x. The catch was that they were already paying through their nose and they didn't have the headroom without promoting me levels. It happens.

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