How to use an external job offer to get a pay rise at current company? (UK)

Question

I am from the UK as I understand culture might influence the answers.

I have seen some questions similar asked here but I think there are some nuances that should permit this question being asked.

Question

I was asked to interview for job X, and despite not actively looking for work I decided "why not?" as the role sounded interesting to me, so went to interview for job X. Ultimately I didn't get job X but the company did decide they wanted me for job Y. Job Y is basically what I am currently doing so I have less incentive to move to job Y from a career progression standpoint. I am comfortable at my current job and perform very well according to my reviews.

Ordinarily I would just say thank you but no thank you and move on with my life...however job Y is offering me approximately 40% pay rise. At a time when the cost of living in my country is proving very challenging I feel this kind of pay rise is very difficult to say no to. It will have a significant impact on my ability to afford housing, save, and improve the quality of my life. It isn't just me being greedy and desperate for more money. There are significant and tangible benefits from improving my salary now.

It is worth noting that my current company has been promising a review of my salary to make sure I'm being paid adequately and up to what the market is offering for my skillset. I am unaware the current status of this but highly doubt any pay rise will come close to what job Y is offering me.

I am happy my current role, I get on very well with everyone, I am a top performer in my team, and I don't have a desire to leave. I get on with my manager and she understands the personal aspects of work also (as far as my experiences with her have told me).

Is there a professional way (or at least one that won't get me in trouble) to basically summarise the above, something like. I don't want to burn bridges with my current employer.

I have been offered another job doing the same work for a substantial salary increase. With the cost of living increases this will have an improvement on my quality of life. I like working for this company and don't want to leave. Can you match what my offer?

Answer 1

As a British manager, if a member of staff said to me "I've been offered 40% more money elsewhere", I'd say "cheerio, and good luck with the new job".

The reason is that once someone has gone for an interview with another company, it signals that they have itchy feet, and I must assume they'll be leaving in the near future. Rather than have a period of uncertainty, it is better that they leave now, so I can start recruiting a replacement.

I realise that you didn't initiate the recruitment process, but you did respond to it, and the large pay-increase has clearly got you interested.

You may ask why I don't just pay a staff-member more, but the company-wide setting of rates of pay is a complex issue; 40% is probably far more than the company could agree to, and there is the danger that other staff will start demanding similar wage rises, which the company certainly can't afford.

I might be able to offer a small sum as part of a pay review (maybe around 5%), but the gap between that and 40% is so large that it is unlikely to cure those itchy feet.

So, if I was your manager, I'd probably offer you very little or nothing extra in the short term. If as a result you do decide to leave, hopefully you don't discover that the nearly-identical job turns out to be far harder work than you thought, since your new employer has significantly over-paid to get you, is demanding a lot extra in return, and if you don't produce the goods, you know what they say about last-in first-out...

Answer 2

Is there a professional way (or at least one that won't get me in trouble) to basically summarise the above, something like. I don't want to burn bridges with my current employer.

What you proposed to ask your boss is perfectly reasonable.

As 40% is a significant increase, be prepared for your company to counter-offer with less salary and make sure you know beforehand exactly what it would take for you to stay the current company.

Also, keep in mind that bringing up an external offer to get a raise at your current company is the nuclear option. You would likely only be able to get away with it once and many companies will eventually try to replace you at some point afterwards.

Answer 3

I'm not sure using an external offer to leverage a raise at your current job is a way to go.

Basically, if you're unhappy, overall, then leave. You'll be a higher paid unhappy person if you manage to get a matching raise. If you're happy, and just want more money, then you might wind up a higher paid unhappy person elsewhere if you just go by the raise offered and leave. Look at the whole picture, and make sure it's not JUST about the money, which you seem to indicate it isn't.

Generally speaking, if you get an offer attractive enough that you want to leave your current company, taking a counter-offer, when offered, to stay is a bad career move. In this case, you're initiating a process where you're asking for a counter-offer to stay, so all the same baggage applies.

You company severely undervalues you and severely underpays you, you feel. Will using the leverage of losing you to a more lucrative offer make them value you more? Is there anything fundamental in the way that they are doing things that will change over this exception to their normal way of doing things you are asking for? Will they say "wow, we undervalue this person so much," or might they feel like they weren't completely wrong, and are now overpaying you?

Being forced into giving you a huge pay bump, will they begin making much, much greater demands from you? Basically, they've thought that you're worth X. Will being forced to pay you X + 40% make them feel like you need to be 40% more productive or put in 40% more time?

If you leverage a raise like this, it's often starting the clock on the end of your time with a company like that. Replacing an employee is a very costly process. The hiring and training process is expensive, the disruption and adjustments needed to make up for losing you is also costly, especially if they have to do it on short notice. If they feel like "this person isn't happy here, he's going to leave for a higher offer if one comes along" or "he's just about the money and we can't be sure he won't do this again," then accommodating your wishes will last long enough for them to have a more orderly and less-expensive transition planned and prepared for, at which point you'll find yourself "downsized." And they won't feel bad about it, since using a outside offer in a way that boils down to how many zeroes on the check allows them to be more cold-blooded in their assessment, since that field of play has already been selected.

So, instead of using the actuality of an offer to leverage a raise, use it as your own basis of comparison or point of reference. Tell them you believe you are being compensated well below market, ask them to look at your position and ask if they can adjust your compensation accordingly. If the other company is at market value, they should come back with a much better offer. If they offer a raise that doesn't come close enough or isn't serious, be prepared to leave for the offer you have in hand.

But I would say that showing it to them as a negotiating tool has potential drawbacks that you need to consider.

Answer 4

Ordinarily speaking, companies don't give out 40% pay raises out of nowhere. If you go and ask for a pay raise I wouldn't expect more than 10-15%, no matter how well you can negotiate. It is likely that you can not expect the amount of money offered to be matched for quite a few years to come from your current employer.

In regards to how you can leverage other offers without looking like a job hopper, you can't. A employee that knows his worth is never going to tie himself down to one single company because loyalty isn't usually rewarded, it's taken advantage of.

Ultimately, having a job you like is worth a lot but at the same time a 40% raise is a lifestyle changing amount of money and while there is a risk involved in whether or not the new job could be less enjoyable, it could also swing the other way and be a even better experience.

It would be sensible to pursue the option offered and part with your current employer in a amicable fashion.

Answer 5

40% is a handsome increase, personally I have previously been in a similar position and in my case I took the job, did well and guess what? 6 years later I rejoined the same company I started at but in a much more senior role.

As you are well thought of and your work is of a high standard, you could possibly leave the door open if you play a straight bat with your employer. Put some thought into your resignation letter and emphasise how much you have enjoyed working there and with your colleagues and how difficult a decision it was to leave despite the pay increase.

I would not recommend going down the counter offer route for numerous reasons, every time I've seen that done the person usually ends up leaving not too many months after and even if they don't then they are marked as a flight risk. Not only that but you're likely to alienate yourself to the company which has just made you an offer if you blow them out to a counter offer.

I'd recommend you do your due diligence on the new company with glassdoor etc and then decide whether your culture and colleagues are worth more to you than 40%.

Answer 6

"I'm underpaid by at least 40% should I do something about it?"

That last para reads like a pretty good summary to give them. I seriously doubt you'd get 40% raise, but your current company may well offer you more to stay.

I would probably start by telling the new company that you're interested and would like to proceed. Get an offer in writing before you quit (to be clear, a written, signed contract - not an offer letter). Once you have that, you'll have a backup plan if your current company take it badly or flat out decline to negotiate.

At which point it becomes a tradeoff between existing comfort and possible raise vs new but more remunerative.