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I joined the company as a junior engineer and the pay was a fair salary for the role. The first year I got a small 5% increase which is typical. So, in preparation for 2nd year annual review, I started applying for jobs and to see what I am worth and would like to use that as a base for negotiations. Note that I am currently happy with the company and has no intention of leaving.

I found that my fair market value would be 20-30% pay rise as a strong mid level engineer after few offers that I turned them down all. However, there this one offer that I simply can't refuse, basically it was for a senior role with almost 50% payrise. I thought my current company wouldn't be able to match it as I heard from people usually it's very rare that current company could give such an enormous rise. So, despite being very happy with my current company and boss, I accepted the offer and hand in my resignation.

My current company counter offered me that they would happily increase my pay by 40% and without a change in position. It is at the high end for mid level engineer and is quite high for non senior role.

I am tempted to accept the offer as I am currently still happy with my current company but after reading so many advices that are generally against accepting a counter offer, I'm concerned whether it would work in this situation? I believe they wouldn't increase my pay that high at 40% hadn't I not give my resignation, probably more like 20%. So, I am more concerned about the intention of my current company...

  • Where in the world are you Justin? If you're in one of the US states where people have no rights then it would be a bad idea to stay. If you are somewhere where it's hard to fire you then that reduces the risk of staying considerably. – Tim B May 7 '16 at 17:31
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    @TimB I am not reading anything here the company is looking to take punitive action. If they were doing it to fire the guy at the first opportunity they would have flat matched. OP said he is currently happy - must be decent environment. – paparazzo May 7 '16 at 19:09
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    @Joe I'm in Sydney, Australia. The pay I got between for a junior engineer with 1-2 years exp is 60-70k which is fair pay, now I have strong 3-4 years I can easily aim for around 85-90k if switch, but I got lucky and accepted the offer with senior role for 110k. Yes, I am happy with my current workplace and think had I ask they are willing give me the 85k I deserve which is I think is also fair, but instead the counter offer was 95k to 100 which I don't think they will have given to me had I not ask. – Justin May 8 '16 at 1:23
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    On a related but different note, I find you grow the most as an employee when you change companies. The experience of how different companies work is valuable knowledge. – corsiKa May 8 '16 at 1:42
  • If you weren't low-balled in the first place and you increased your value by 50% in two years - you must have been low-balled. The only way I see that happening would be if you became a PE, which means you had at least 2 years experience before joining this company and when you got that, they should have promoted you. – Raystafarian May 8 '16 at 8:43
25

Personally, I feel you went about this the wrong way. If you were happy about everything except the pay, then you should have told your manager that and say that it's becoming something that you can't ignore. You wasted the time of the companies and people you interviewed with if you had no intention of changing jobs. There are other ways to find out the how much people are making in your area for you current job and skill level.

But, what is done is done. You have given notice. In my experience, you should follow through and go to the new job. You have now shown your current company that you have no issues with leaving them. If you accept, you're basically allowing them the time to find someone to replace you and they can replace you at their leisure.

Second, if they could only offer you this raise when you said you're leaving b/c of the low pay, it means they were low balling you and have no real intention of paying you what you're worth. This means, next year you won't get much of a raise.

I have known people who have taken the offer and stayed at their current company only to be let go less than a year later. Or, having upper management turn on them b/c it's felt they aren't loyal to the company any more.

You've started crossing that bridge, might as well make it to the other side and try not to burn it along the way. :)

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    "Second, if they could only offer you this raise when you said you're leaving b/c of the low pay" - It's not clear to me if the OP ever asked for a raise. It's possible he never did, so this observation might be a bit premature. In that case, they might have given him the raise if he had simple asked for it (or maybe not). – marcelm May 7 '16 at 16:51
  • @marcelm - I was basing that on personal experience. I had a boss in the past that had low balled me. When I found out I asked for a raise he said it wasn't possible. I thought on it and went back and said I would be looking for a new job. Suddenly I could have a 10k raise. – Tyanna May 7 '16 at 18:11
  • I agree with most of this except "if they could only offer you this raise when you said you're leaving b/c of the low pay, it means they were low balling you and have no real intention of paying you what you're worth." That just seems totally wrong. Like all good hires, his value increased over time, but no company is going to just out of the blue give you a 50% payrise for the sake of it. Either you eventually get around to asking for one and get lucky (much like the OP has done), or you increase your salary by moving to a new role elsewhere. – Lightness Races with Monica May 7 '16 at 19:18
  • Yes, I didn't ask for the raise before, I just assumed company would not give me 50% raise because it's usually the case. Also, I don't think I was lowballed when I first joined, it's just my value increases over time in such a short time and the review is done annually. I actually believe 20 - 30% raise is the industry average and is what I deserve, however I just got lucky landed on 50% payrise. – Justin May 8 '16 at 1:32
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Look, none of us here can know what your bosses are thinking, or what kind of people (honest, honorable, malicious, etc.) they are.

You're posting this because you have doubts, and you're looking for someone to validate a certain course of action. I understand the psychological need to get a second opinion, however realize that this is all just guesswork and anecdotal advice:

Your bosses were perfectly happy to pay you $X for the past 2 years. You've now discovered that you're worth rather a lot more than that, handed in your resignation, and they're offering you $x*1.4. That's a big raise.

So ask yourself from a purely unbiased perspective: are you that important in the company? That unique? Do you consider yourself irreplaceable, or so uniquely positioned that your advice and expertise are worth that sort of raise? You yourself express disbelief at the huge amount they're offering you, and tell us that you only expected maybe half that increase.

I'm assuming you've soul searched for a little bit and answered: "No, I'm not actually that special in this organization."

So then, let's look at this situation from you boss's perspective. Your senior engineer is quitting. The guy caught on that he's being paid well below market value. Damn! He's not irreplaceable, however it takes months to hire a new guy, train him up to speed, etc. Your projects are going to suffer. So what do you do? Well, he wants to jump ship, so he's shown himself to be unreliable - that's not an opinion that's ever changing. But it would be better if he were to stick around for another 6 months, maybe a year. I know! Let's offer him a pile of money! I'll even give it to him in writing! But I'm not going to tell him that as far as I'm concerned he's as good as fired, right? After all, I'm not stupid.

OR, your boss simply adores you.

Good luck!

5

The problem with accepting the counter-offer is what happens in future. You would then be at the top of the pay range for your current grade. The company could therefore quite legitimately not make any further significant pay rises until you are promoted - and that might take a long time. You can't force the company to create a new senior position just because you think it's "only fair" that you should occupy it.

You were happy to take the new job before you got the counter-offer, so logically you should still be happy to take it now. I would recommend you do just that.

4

Don't take the counter offer, plenty of reasons not to, but one surpasses them all.

The new job pays more, and with the counteroffer you have probably hit the limit and can't expect much more in the near future.

With the new job, you're on the way up, and can expect regular raises and a stronger bargaining position. You may like the company you're in, but I liked all the companies I was in barring a few weird ones, at the end of the day it's about money and a way forwards.

3

It's dangerous. Just two days ago someone asked here about the same situation where he accepted a better offer from the old company, didn't accept the new job, and now the old company isn't paying up. It's very dangerous.

I personally think once you have decided that you want to accept a better offer, accept it. You may look at positions elsewhere to find out what they are paying, and try to use this when you negotiate a payrise. Once you went so far to have a job offer, as the previous employer I would be very weary. I might want to make an offer to keep you there for some time, but long term your position is quite bad.

You might not have realized, but if the company is offering you 40% more, that means they were quite willing to employ you for a third less than you are worth. Your employer knows about money and realises this, and they surely know that you will be annoyed when you find out. Again, bad for your long term position.

1

Accepting a counter has a lot of ways to go bad. Are they just doing it to keep you around for the short term but have written you off for the long term?

But you like where you are and you were able to find jobs pretty easy. You can just wait 6 months to a year to see if it was a good faith counter. If not look for job again and you have salary 40% higher.

If you don't think you can find a job in 6 months similar to the current attractive offer then you should take the current attractive offer. With a Sr role and higher salary there are going to be higher expectations. But, that might be something you want.

Being happy with your current job is a big deal. Countering did not necessary poison you. It may be legit good faith counter.

1

I have been in this exact position.

After working for a while with a company, I was approached with a similar position at another, with an offer that was 50% higher than my current salary.

After being given the formal offer, I notified my manager that I'd be leaving and taking another position somewhere else.

He immediately offered to match the 50% raise.

Rather than accept the counter offer, I opted to move to the new company instead (Even though this involved moving myself across the country).

The reason for this choice was simple: the bump in salary was something that would have been attainable only at what was the end of my career at company A, but was the starting salary at company B.

I also felt better about the experience that I might have at a company that had offer me an appropriate starting salary, one that matched my market value at the time.

I knew that I would be taken care of at company B, yet I had already felt like company A wasn't enough for me.

In situations like that, the counter offer is not a solution. If you're looking to find a new place, and you find an offer that makes sense, don't consider the counter offer. As you have probably read, what may be a majority of employees that accept counteroffers find themselves moving to other companies within 24 months anyways.

If you're not happy where you are, you likely won't find success in your original employer's camp after accepting a counteroffer. From a high level perspective, you may have reached the salary and/or other terms you wanted, but it puts you and your manager and possibly others who were aware of the situation at odds with each other.

It can be hard to come back from that and continue with your career after you accept a counter, in comparison to starting at a new company where you may have received the terms of employment that you sought, and have the option to start with a blank slate.

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