Fact: 70% of executives who accept a counteroffer are gone from that employer within 6 months.

Fact: 85% of executives who accept are gone within 18 months.

A counteroffer is an offer made by an employer in order to keep you on after you have given notice.
The most frequent counteroffers strategies include:

1. a promise of a promotion and/or a raise (most frequent response)
2. telling you are a traitor to the team or to your boss
3. confiding to you that the company you are considering is not that well thought of

Let’s examine some of them in more detail:

We had this raise in the budget for you

You need to think about your previous relationship with the company. Why did you have to threaten to leave to be put on the list of people who are scheduled for a raise or promotion or job you wanted? Did they really have the money set aside for you? Or did they have a limited contingency budget to be released only for the few folks who threatened to leave but not to be spent if they did not have to? Have you just used up your future raise early so the next one will be delayed?

Don’t be ungrateful to the team that embraced you

This kind of psychological argument makes you feel bad and it costs the company nothing. “You wrecked the morale of the team.” “You will keep everyone from being able to take their vacations.” Your boss may tell you he will look bad if you leave (and perhaps he should.) “After all we have done for you…”

Importantly, as you have just placed your own goals above the goals of the team and/or management, won’t they be reluctant to trust you again on the same level? When raises next come up for review will you be less likely to be given with one of the key player awards? In order to protect their own interests, won’t the team be looking for alternatives to replace you in case you try to leave again? Aren’t you now higher on the list of people to be cut in a RIF (Reduction In Force?)

You are leaving to work for THEM?

The potential employer is usually criticized as a poor business risk. Your present employer will probably avoid a discussion of how the potential future employer treats staff in order to avoid a discussion of how you were treated.

The power of psychological warfare

One ad agency here in town kept an account executive, who had just accepted a job through me, incommunicado in a hotel for three days under the influence of several senior executives. Not even letting him call his wife, he finally capitulated in tears and said he would stay on. It bought the agency a couple of months more with a key client before he left the firm.

The economy

The frequency of counteroffers is increasing because pressures on company profits are increasing. This is due to a combination of factors:

• the speed of competitive innovation is increasing
• we have been in several soft economies since 9/11/01
• automatic cost of living increases and raises are disappearing
• rewards in many companies are shifting to very senior employees at the expense of the rank and file

While a good manager understands that the counteroffer is a short term solution, expect this trend to continue to accelerate in the future as the counteroffer buys the company time to figure out how to replace you more gracefully (for them) and at the least expense and risk.

How to resist a counteroffer discussion

Here is how to avoid even having the discussion of a counteroffer come up.

1. Resign by written note and don’t hand it into management in person. Email it in and don’t be in your office when they come looking for you. Mail it at 5 pm or on a Friday so it is harder for the recipient to organize a full frontal attack. (Remember the account exec and the hotel.)
2. Don’t be ambivalent about your leaving in your verbiage. Include phrases like “I will be leaving on this date” as opposed to “on a date to be determined.” (The normal business courtesy expected from you is 2 weeks. Don’t skimp on the length of notice as it sends a bad message to your new employer if you are willing to shortchange your old employer.)
3. Don’t use phrases like “I am sorry to leave“ and “thank you for all you have done for me” as it sends a signal they may be able to make you feel bad. The briefer your note is, the fewer levers you hand them to come after you with.
4. Avoid discussions with bosses and team members about your motives for leaving. You can thank them several weeks from now.
5. Meet as many of the people you will be working with at the new company, your new team, before you give notice. Introduce your significant other to them. It will remind you there can be more than one team in life and that the new team is very excited about having you join them.

Selling Yourself to Management

As I said in my last post, as a recruiter, I am not actually seeing any evidence of a Recession outside of the financial industry. However, many of the strategies that protect you in a bad market also improve your status with in a good market.

• Network to keep your value, your brand, visible at all times with your present management and clients. Networking builds bridges to get things accomplished on an every day basis. You should be networking at 2 or 3 title levels above you as insurance if your boss leaves the company. Network with other departments. Network with people junior to you as they may have very different philosophies towards work.
• Look for opportunities to demonstrate how you made (or can make) the company money, saved the company money or made it more efficient. Praise co-workers frequently and tell their bosses. Increase visibility and momentum for your entire team.
• Improve the quality of your written and oral presentation to be a more effective advocate of your ideas. Dress and act more professionally.
• Volunteer to be on committees or projects where you can showcase your thought leadership across the company. Mentor co-workers, help your boss on his/her pet project.
• If you are telecommuter make extra effort to remind teammates you are mission-critical. Be in the office often to build the interpersonal bonds.
• Create opportunities to solicit written feedback on your performance. Send status reports. Ask for signoff on future project methodology. On projects just completed ask your boss if he/she would add anything the next time. The paper trail can be used at review time to remind your boss of the great work you did and, not incidentally, that he/she signed off on your methodology. If you ever lose your job in a large RIF, you have a collection of emails at home you may be able to use to get a job in another department or at least use to find another job. You can use the same method with stakeholders in other departments.
• In a slow or negative economy, especially at a public company, bonuses are easier to negotiate than raises (because bonuses affect the stock price less.) Raises are more likely indexed to company performance and merit bonuses are less wide spread amongst employees. This is not the time to demand a raise or you will leave. This not the best time to be the most expensive person at your band/grade level. This is the time to be more flexible with your employer to give him more room to maneuver and keep you if cuts do happen.