So I am currently working in a company for about 6 months as a full stack developer, and when I joined the company I settled for a low salary package, due to hiatus from development for personal reasons and I was desperate to get a job.

Now since the pay was low I started​ looking for other jobs and got a offer with 32% hike in my pay. I was happy with this offer and confirmed it with the new company.

Now when I asked to resign in my current company they said they would instead pay me 40% more than they are currently paying. It was pretty unexpected and I asked for a day to think about it.

So should I inform the new company about this? What if they up their offer too. I am kind of confused on how to approach this further without making it awkward.

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    Rule of thumb: when you have decided to leave, leave. – Jane S Oct 14 '17 at 0:36
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    If your current company responded so fast, doesn't that mean they knew that you were underpaid and had a contingency plan to counteroffer? – Frank FYC Oct 14 '17 at 0:52
  • There is a second rule of thumb, a proverb if you must: A bird in the hand is worth two in the bush. Think carefully - which you obviously are, hence your question. And with a nod to Frank FYC, I believe the company could see your desperation and acted like any astute business entity would. Could be they are not bad, they have business "savvy", is all?. – Stan H Oct 14 '17 at 1:20
  • If you decide to take the raise in your current company, you will be a marked man for the rest of your stay. If the company has layoffs, you will be first on the list. It is very likely you will not be considered for future raises or promotions either. In other words, don't stay. – Juha Untinen Oct 14 '17 at 6:17
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The trap to avoid is to accept to stay in your current company at a higher salary. Sometimes it'll work out fine, but more often than not they'll just buying time to replace you on their own schedule. You've decided to leave; just leave.

As to the new company, it'll cost you nothing to inform them in passing, e.g.:

I'm a bit in a pickle - they just made me a counter offer, and want to give me $X to stay behind. I'm still fully committed to joining your company, but was wondering if you'd match their offer as a courtesy.

It sends two messages: a) you're joining regardless and b) you could get more elsewhere. As a hiring manager I'd sympathize unless I can't possibly make the numbers work, and do my best to match the offer or throw in some kind of hiring bonus or benefits or stock options so you've no second thoughts and call it a day.

Your position is strong because a) the company has already decided you were better than the other candidates, and b) you're already showing enough loyalty that you're not renegading on your commitment because of a better offer.

Worst case, their budget doesn't allow them to be grateful that you're still coming, and you'll know to look for a new job the next time you want a raise.

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EDITED: To answer your question, don't inform the new company yet.

Behind your question, I see many questions not specifically asked but I suggest your question could not be asked unless other important questions were there as a necessary root cause behind the one eventually asked "out loud" here. Indeed your final comment clearly reveals the presence of those unasked questions and just how fundamentally important they are to you.

Bargaining between businesses in the specific circumstances can be very risky. I can of course only guess at the unrevealed details, but with knowledge to hand of your situation, I would suggest finding out a few things first, then the answer to your question will almost present itself (but I will still give an answer):

Very quickly (yet very accurately) assesss the work situation where you are now. Do you work well with your peers? Is there mutual respect in evidence? Has management indicated before now that they value your expertise? How is their business acumen (in terms of bottom line, not what the company produces)? How long has the company been in existence?

These above are some of your urgent considerations. Once you have assessed them, you will have a part of the information you need to stay or go.

Now to focus on your present company: How much of the market do they command, and for how long? Do they have a policy of monitoring their customer needs and responding to them? Would you be proud and happy to visit a client company and introduce yourself as working where you are now (and why - or why not?)? How does HR respond to social inter-action issues, and more importantly do you think the way HR does things is always ethical (not legal, take that as read, I mean ethical)?

And the 40% they offered you: Why did they offer it? The obvious answer may not be the right one. As a business, I would offer the least money if it was acceptable to to a competent employee and my shareholders would say that's a very good thing to do.

But after six months of seeing the quality of your work, even if they had not known you were about to resign, six months is still a highly understood (even if not spoken of) period of assessment for a new employee. You may have about to have been given a raise of some amount even so. The knowledge to management of what another prospective employer was prepared to offer you, has simply set the amount of that raise you didn't know was coming.

Finally, what are market conditions for jobseekers overall right now? Obviously six months ago when you took that low offer, conditions were bad for jobseekers. I would not automatically assume that it is easier to find a job now. There is an understanding extant, based on what evidence I don't know, that it is easier to find a job if you are presently employed when you seek, than if you are unemployed when you seek it. So what are ALL of the reasons, subtle and hard, why your prospective new employer offered you the job instead of someone else?

Unless your research on your new company comes up with glowing reports based on hard evidence, I would stay where you are if the company you are with now comes up looking good after you have done the assessments I have suggested.

If all of the above means you decide to stay, that is very good for you for other reasons. I may add these in an edit, but this is long enough.

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  • @user78221. All 3 answers, which includes mine, to your question, IMHO have given you excellent advice. My answer was marked down for the specific reason it "didn't answer the question", hence my later edit at top of my answer. I suggest that my answer should be included in your reading in spite of its "minus 1" rating because it will make you think deeply & from different perspectives about all of the reasons which are clearly causing your stated confusion. All answers are greatly useful to you but I directly address your 9 word question - don't make the call YET. Think and assess first. – Stan H Oct 14 '17 at 10:57

All the points already made are solid advice.

However, ask yourself at which company you feel you'll be happiest. If you were interviewing because you're unhappy, then take the newly offered job (and decide whether it's worth the stress of negotiating for more than the initial offer [sometimes it is, sometimes it isn't; this is a personal decision]. If you were interviewing to find your worth, consider sticking with your current role if you're decently happy already.

If both are great companies and you're still torn, consider the benefits each one offers, including medical/dental/vision/etc., commute time, telecommute option, PTO, culture, growth opportunities, work/life balance, etc.

Sometimes a higher salary is tied to a better job, and sometimes it isn't.

I'd recommend that you overlook the idea that they may have been underpaying you because they knew they could simply because you accepted it when it was offered due to your own personal insights into your abilities at the time. Right or wrong, you felt it was fair (even if it wasn't or you later regretted it), and holding that against them isn't going to help you make the right decision.

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Well it depends, if you already signed contract and definitely confirmed with the other company then it would be unprofessional from your part to back off now.

Now, if you still haven't made it official then you are still in position to negotiate. You can try to take those offers back and forth, so you can maybe get 42%, or then %45... but this could be risky. If you play it wrong you may end with both offers being rejected.

It is up to your criteria to decide if and how much to push further with the offer, you can try reaching the other company and explain that your current one matched the offer to see their response. If they increase even more then consider taking it, if not accept the raise from your current company.

As I said, it could be risky to keep bargaining repeated times so proceed with care and at your own judgment and negotiation expertise.

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