Asking Potential Employer to Match Another Companies Higher Offer

Question

I have often heard that having multiple job offers on the table at the same time is a great place to be in as it gives you more negotiating power. This seems perfectly reasonable to me, especially in a highly competitive industry (software) where salary negotiation is almost expected.

Now, I have found myself in this situation (three offers on the table). I talked to my current boss (who has been in the loop on my whole job search, company is downsizing) about my plan to take the highest of the offers to the company I want to work at most and ask them to match it. He told me this was a very bad idea, that they would just say no and I'd be forced to take one of the less than ideal jobs. He said if I really want to work at my first choice that much, I should just accept the lower pay.

At this point I have pretty much decided to ignore him and carry on with my original plan. However, I can't get what he said out of the back of my mind. I honestly think the chances of it going as wrong as he says are low, but I also don't want to risk not getting my first choice. The difference in pay isn't huge and my first choice does have better benefits. If given the choice between lower pay at my first choice and higher pay at the other, I would probably choose the former.

So now part of me wants to play it safe and take the lower offer, but I don't want to leave money on the table. I suppose I could just respond with "Can you do $xxx,xxx?" or something, but that doesn't seem like it carries the same weight.

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TL;DR

Would it be inappropriate and/or risky for me to bring a written offer from another company to the company I want to work for and ask them to match it?

Answer 1

You asked,

Would it be inappropriate and/or risky for me to bring a written offer from another company to the company I want to work for and ask them to match it?

I think that's two separate questions. But before we get to the questions, I think we should clarify that if you receive an offer from an employer you really like, but you feel the offer is low, it's always appropriate to attempt to negotiate something higher. Employers expect that.

Now, let's answer the easy question first:

Would it be risky?

A company that likes you enough that they're extending you an offer likely won't be offended to the extent that they withdraw their offer, so in that sense it's not risky. Also, if you've interviewed with that company, you've implicitly made it clear that you're in the middle of a job search, so that employer finding out that you're also interviewing (and receiving offers) elsewhere won't be a surprise, and likely won't be important information for them.

Would it be inappropriate?

If by "inappropriate" you mean "not effective" then I think the answer is yes, it would be inappropriate. As a hiring manager, I don't really care if you're getting better offers elsewhere. I'm evaluating you, as a candidate, based on what you're worth to me and what value you can bring my employer - not based on some other company's needs or criteria.

Further, a problem with basing your negotiation on another company's offer is that you're inviting this employer to justify their lower salary by comparing offers in other ways. Maybe this employer gives more PTO, or better 401k match, or allows work from home, or flexible hours, or a tech stack you actually want to work on, and so on.

I've watched this offer comparison game play out over and over. At my current employer, there's a competitor in town that (famously) pays high salaries. Some candidates I've extended offers to will point out that they have a higher paying offer from that company. The problem with them doing that as a negotiation tactic is that I can now point out that my employer offers more PTO, a better 401k match, better health insurance, more self-direction in terms of picking your tools and methods (and sometimes even projects), occasional work from home, an actual employee parking lot (instead of paying for your own parking), a fully stocked in-office kitchen, and a much more supportive and positive work environment (which is the polite way of saying: we won't put you on impossible projects and then bully you into working tons of overtime until you burn out, like that other company will).

It's to the point that when candidates mention that employer by name, it almost plays into my favor, since I can quickly focus on the reasons why my environment is better than that competitor's. I'm often happy to negotiate on salary in the offer process, but mentioning another offer doesn't play a significant factor. Even when they don't mention another company by name, it's pretty easy to take the conversation in this same direction of focusing on non-salary reasons why my employer is a great place to work. What I really want as a hiring manager is someone who will be happy and satisfied working at my company, so when offer comparisons happen, I will quickly shift to describing the big picture, rather than just getting worried about meeting some other company's salary. If a candidate is actually driven solely by getting the biggest salary, I will probably lose that candidate, but that may be the best thing for everyone involved, in the end.

Ultimately, if you've gotten an offer that you think is too low, and you want to negotiate a higher offer, you should base that negotiation on things that matter to the hiring manager:

• Be ready to show your experience and how it's relevant to their needs.
• Be ready to show that you're a team player and would fit well with their team
• And so on

A piece of paper saying you're worth $X per year to another company doesn't really help prove any of those points, so at best it's unimportant in terms of how I (as a hiring manager) decide on what salary I should offer you. Ideally, you've touched on these things in your interview, so you don't really need to rehash them, but it can't hurt to mention in summary during your request.

Answer 2

If the difference in pay isn't that much then you should go with your first choice based off of company/workload. It's not all about money, you should pick the best company for you. Based off of work/life balance, vacation, and other benefits as well. Everything comes into play when making a genuine decision that would impact your life. I personally would take smaller pay and a great working environment over the higher salary if I were to just be miserable.

Answer 3

It would be an unusually extreme reaction for an employer that's in the contract negotiation phase to completely withdraw an offer due to a potential hire asking for more (within reason, of course, don't ask for $1M after an offer of $100k). Negotiation is acceptable and expected at this stage, so as long as you don't paint yourself into a corner with an ultimatum ("I will reject your offer unless you give me $Y"), you can ask for more and see what they say. Having other offers is a very concrete representation of your market value, so it can be a useful data point to use as leverage. It's not essentially different from any other salary negotiation process, except now you have the best data possible to back up your own assessment of what you're worth.

In any other salary negotiation process, the company can offer $X and you can counter with $Y, which you can then justify with reasons about your experience or expertise or whatever else. Now you can counter with $Y, while having evidence that the market does, in fact, agree that you are worth $Y. In any negotiation process, it boils down to stating what you want and why you deserve it, and now you have objective evidence of why you deserve it.

Answer 4

I really disagree with the claim (see @dwizum's answer) that discussing the existence of another, higher, offer is "not effective" (though I don't think you should just drop the other firm's offer letter on their desk, but should use it as a powerful negotiating tool).

While there is no guarantee that the OP can convince the hiring manager to match another firm's offer, I think the existence of the other offer makes the OP's negotiation easier.

My suggestion would be to approach the hiring manager and say something like: "Thank you for this offer, this seems like a really great opportunity. I've been extremely fortunate, as I've received multiple offers, all from places I'd like to work, and I'm really going to have a tough time choosing, as each offers different things. One of my other offers is for more salary. If you could beat that offer, then that would make the decision process much easier."

My point is, the hiring manager has already decided that you are qualified to fill the position. Assuming the firm has the ability to pay the higher salary (it might already be within the range available for the position) and assuming the higher salary is not substantially more than the manager thinks you are worth, the cost to the hiring manager by not offering more is actually pretty high: they lose out on a qualified candidate and they need to restart the hiring process.

Of course, they might say no - as they might not think you are worth that money, or might not have the money to spend. There is even a small chance they pull their original offer. So don't negotiate unless you are comfortable with either of those outcomes.