How to Leverage Another Job Offer (The Right Way)
Some people say the only way to get a real raise is through another job offer, and the numbers back up this claim. A 2016 study conducted by Glassdoor Economic Research found that workers who change jobs receive a 5.2% pay bump on average. This is much more than the 2-3% raise a worker can expect to see each year, according to the most recent data from the Bureau of Labor Statistics.
Consequently, more often than not, workers find that in order to get that bigger pay bump, they need to leave their company for another. And that becomes easier when another company shows interest in you.
But what if you actually like your current role, and don’t want to leave your organization? In that case, you could potentially use the interest in your skills to your advantage, especially if you are ready to take on new responsibilities at your current company.
Going to your employer with a competing job offer in hand involves some risk. But if you play your cards right and understand your company’s HR metrics, you might find yourself in a more lucrative and compelling role than before the new opportunity came along.
Below is a breakdown of how to leverage another job offer to get what you want—without burning bridges:
First, understand the stakes of leveraging an offer
Using another job offer to get a higher salary and job title at your current company is only advisable if you’re genuinely interested in the competing offer.
Here’s why: Of all the strategies that you could use to negotiate for more money, a competing offer can get you the highest reward but it also carries the greatest risk. If things don’t work out the way you imagine, there is a chance that you might have to walk away from your current employer.
A 2015 survey from the recruiting firm Robert Half found that 78% of CFOs said they wouldn’t counter another offer to keep someone from leaving. This Harvard Business Review article advises making sure that you’re valued in the company, and that your current employer sees the other company and offer as a “credible threat.”
In other words, is the other company reputable, and does the offer include a higher title or better opportunities for growth? The answers to these questions must be obvious both to you and your current employer.
All of these risks might not deter you from using this tactic to get higher pay if you’re interested in the other job, but the other job and offer need to be compelling in their own right. If not, you could lose the job you love and end up with an offer that’s not so great.
If your motives are genuine, however, then it’s a win-win situation. On the one hand, being honest with your current employer reminds them that you’re a valuable asset that others are bidding for. You are also reminding your employer that it’s their responsibility to support you professionally in terms of growth. That includes making sure that you’re paid fairly and receive proper support to take on new responsibilities.
If you’re going to leverage a job offer, here’s how
Focus on the numbers
What is about the counteroffer that’s so powerful in getting companies to find money that they once told you they didn’t have? The counteroffer gives employers more data and information as to what you’re actually worth. Once they have that information, it legitimizes your request for a higher salary (or better title).
Knowing the power of data, you should also check out resources like Glassdoor, Salary.com, and PayScale to get a better idea of what other companies pay for people with similar experience and skills. Talk to people in your industry about your earning potential as well. That way, when you go in to speak with your boss, you’ll be armed with data from the counteroffer along with other evidence you’ve compiled on your own.
By sticking to the numbers, you’ll also have a good idea of what’s fair, and you can then determine when you would walk away if things don’t turn out how you expect. For instance, if your boss can only give you half of what the other company offers, will you walk away? Or can you negotiate other terms?
Be holistic about your value
While money is important, it’s smart to consider other negotiable terms in your compensation package, like equity, perks, and bonuses. The more you speak with experts in your industry, the better idea you’ll have about what is up for negotiation.
This is important, because if you do want to stay at your current company and your employer can’t offer you a raise at the moment, maybe they can offer other incentives. Some examples include better work-life balance, sponsorship, and more paid vacation days.
Whatever you want from your current employer, be sure you pin down your “ask” before you get to the negotiation table. Don’t go in there and say: “I have another job offer. Now what can you give me?” This could sound demanding and put your manager in a defensive mode.
Stick with a collaborative approach
When most of us approach a negotiation, we think there are two sides and if one side wins, the other loses. The “me versus you” mentality, however, is the worst way to think before speaking to your employer. Instead, you should think about you and your employer being on the same side of the negotiation table.
First and foremost, understand that there’s a good chance your current employer will get defensive that you are alluding to competing interests. To avoid this from happening, it’s a good idea to start the conversation emphasizing how much you value your role and the company. That way, you communicate that you’re a loyal employee who wants to grow with your current company—without sacrificing your market value. Only then should you introduce the fact that you’ve been presented with an alternative career possibility, including details about their offer.
Next, you should connect what’s good for you to what’s good for the company. That way, instead of a “me versus you,” the conversation becomes: “How do we find a way to be happy together?” For instance, you could mention that you getting paid fairly (and in line with what you’ve been offered) aligns with the company’s values. Or how getting a better title would allow you to take on more responsibilities that would help the company’s bottom line.
Finally, consider your manager’s interest. If you’re asking for higher pay, think about what your manager needs to do to get you that raise. If they’re worried about how that bigger paycheck would impact pay equity for the rest of the team, then you should come up with ways to help them solve that problem. In other words, make it easy for them to say “yes” to what you’re asking for. This might be where alternative forms of compensation, such as additional vacation days, come into play.
Whatever you do, don’t go in there with ultimatums. You want your boss to know that you two are on the same side.
The bottom line on leveraging an offer
When a lucrative job opportunity comes you way, you owe it to yourself to bring this up to your current employer even if you aren’t planning on leaving. This is your career and professional development on the line, and companies—even the best ones—sometimes need perspective on your market worth.
However, there is a way to do this tastefully and strategically. By focusing on the numbers, being holistic about your value, and sticking with a collaborative approach, you make it easier for your employer to say “yes” to your ask. But know that the risks are high, and the tactic probably works only once. It would be bad form to go back to the negotiating table a few months later with the same tactic and a similar goal in mind. Basically, when you have the opportunity, make it count.
This guest post was authored by Meredith Wood
Meredith Wood is the Editor-in-Chief at Fundera, an online marketplace for small business loans that matches business owners with the best funding providers for their business. Specializing in financial advice for small business owners, Meredith is a current and past contributor to Yahoo!, Amex OPEN Forum, Fox Business, SCORE, AllBusiness and mor