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Apart from this being highly immoral, of course. The reason I'm asking is that an employee that I manage claims to have gotten another job offer, but I'm sceptical about the legitimacy of his offer. We are a small company, and I have no method of checking if this is a legit offer or not. Is it bad practice of me to try and find out? Do bigger companies have methods to handle such cases?

  • Comments are not for extended discussion; this conversation has been moved to chat. – enderland Oct 17 '16 at 23:30
39

Smile, and tell the employee that you will look into what options the budget allows.

Then promptly begin advertising for the position they hold.

If it is a legitimate offer, they are going to leave soon: either they'll take that offer or they'll stay for a very limited time after your counter-offer (see other questions on The Workplace SE regarding whether to accept counter-offers).

If it is not a legitimate offer, this indicates a problematic employee:

  • if they simply wanted a raise, an honest person would talk to you about that

  • if they are prepared to blackmail you for something legitimate, what are they likely to do if they discover the company has an unprotected liability?

  • if they are prepared to lie to you about their external prospects, what internal factors will they be dishonest on?

  • 2
    I do not want to advertise, I want to keep him, if he is being honest, that is! I'm not sure he is going to leave soon. He tells me he really wants to stay, and honestly, I believe him. He has worked hard. Yes, I could give him a raise, but I do not want to do that if he is lying to me. – TrevorD Oct 16 '16 at 10:10
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    While I can understand the preference to keep him around, even in the best case of a legitimate offer and a true desire to stay, there is a very high chance he will leave shortly regardless. Anything more particular than that is up to you and he personally and the company structure and finances specifically. – user53718 Oct 16 '16 at 10:17
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    Because that's what the data tells us. Depending on who asked the questions and where of whom, half to three-quarters-plus of people accepting counteroffers leave within 6 to 12 months. That's why your response is the same in all cases barring enormously strong specific evidence that they are the rare loyalist. – user53718 Oct 16 '16 at 11:21
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    an honest person would talk to you and be rejected without leverage. There is no such thing as a legitimate salary claim. It's the result of a negotiation. – boot4life Oct 16 '16 at 12:45
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    @Nelson the threat component is something to avoid at all costs, yes. But if you say to your boss "Give me free money for nothing in return because it's fair!" he'll likely say no or give a meaningless politeness raise. The art of this is having leverage and then playing it in a socially acceptable way. Your boss does the same thing. He says "We can't pay you more." even though that is almost always factually untrue. He means "I think you won't leave. No need to pay.". – boot4life Oct 16 '16 at 16:14
17

We have often answered here the question from the other side: If you have an offer for a better job, should you go to your boss, tell them, and ask for more money, better working conditions etc.? And the answer is that this is a bad idea, that most of the time you are going to leave anyway in a short time, in the USA there is even the chance that you get a raise, reject the job offer, and get fired a week later.

With that in mind, it doesn't matter if there is a job offer or not. You ask yourself if you are paying enough or not. If you are paying enough and he has an offer where someone is willing to pay him too much, let him go. If you are not paying enough, then you should change that, whether there is a job offer or not.

PS. Just as we will advice people that telling your boss about a job offer that you have is rarely a good idea, we would likely advice them that telling your boss about a job offer that doesn't exist is worse.

PS. If you don't know what your employees are worth, then you could look at job adverts, for example. Your employees would be well adviced to do the same thing. Keep in mind that replacing a good employee means you will get a new employee where you have no idea whether he is a good or bad employee, and even a good employee costs a lot of money to hire.

  • The thing is, how do we really know what paying enough is? I feel he is paid enough already, but if the job offer is legit, I would like to keep him as an employee. If he is lying to me, I would not like to keep him. Do bigger companies have ways of checking the legitimacy of such offers? I'm just trying to understand how this process is in bigger companies when an employee gets an offer, as opposed to me just talking to the CEO (person above me) – TrevorD Oct 16 '16 at 10:09
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    @TrevorD surely you have a way to decide what people are worth paying, don't you? Does his value to you somehow change if some other company is willing to hire him? Either he's worth paying more or he's not. – Kat Oct 16 '16 at 10:27
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    @TrevorD, I think what everyone has been trying to tell you is that bigger companies spend their bigger resources understanding their labor market so they can attract the best employees at the lowest reasonable price. If employees begin to leave to take jobs that pay more, the bigger companies refresh their research and do what they can to keep up (either in money or in other benefits of some kind). Some big companies' HR departments might want to see a copy of the offer letter, but most don't ask for it. They already know what the market values of their employees' various roles are. – Kent A. Oct 16 '16 at 12:42
9

You are almost certainly never going to get confirmation that he lied, and confirmation that he was telling the truth will come with his resignation letter. If he stays, that doesn't mean that he didn't have the offer, just that he didn't take it. So don't waste time on that.

Spend your time on your real problem -- you don't know how much you should be paying him. You should know what his position is worth, what value it brings to the company, and what the general range for his skills are in your area. Once you know those things you can respond appropriately, tell him congratulations, give him a raise, cut his salary, whatever is appropriate.

  • @TrevorD: I would like to add that I wasn't being sarcastic with the "congratulations" bit, just because his worth to your company is X, doesn't mean that it would be X for all companies. If he has found a company that needs him more than you do, be happy for him. – jmoreno Oct 16 '16 at 14:22
  • @jmoreno: Understood, and I agree with Joe, a great answer! You gave me a slight paradigm shift, there! Much appreciated! – TrevorD Oct 16 '16 at 14:41
  • I don't know that cutting a salary is generally good advice. A benefit once given shouldn't really be taken away - except in rare circumstances with employee participation (like a major recession, and even management is in a super tight spot and everyone agrees to reduce). Unilaterally cutting salary will only lead to resentment and low morale. – Joe Smentz Oct 17 '16 at 6:46
  • @JoeC: I gave no such advice. My advice was to find out what he should be paying him. If the OP doesn't know that, and he obviously doesn't, I sure don't. Without that, any advice is pure speculation, might as well use a magic 8 ball. After he knows what he should be paying for that position, he can take whatever action is needed, taking whatever factors seem appropriate into consideration. – jmoreno Oct 17 '16 at 9:59
8

In short, only their morals and integrity stop someone from inventing up another job offer - but it doesn't matter on how you respond at least initially...

These are the questions that you need to answer:

  1. Why did they start looking for a new role in the first place?
  2. How exposed is the company to them leaving?
  3. Have they already accepted the other job offer?
  4. Do you want to keep them as an employee?

(1) is really important. Think about this... did the job offer suddenly appear out of thin air? Probably not. They have had to update their CV, attend several job interviews and so on to get to this point. If you can understand WHY they put all that effort in to do that, you will understand what it would take to keep them as an employee - and perhaps more seriously address these issues so you do not lose more staff in the near future.

(2) This answer allows to understand the consequences of them leaving - and the cost. As it's a small company, It may be that you are commercially exposed to the point that paying a premium for their continued employment for the next 6 months is sensible.

(3) It is normal for people to accept the new job offer and then resign. If they have not resigned, it suggests that they do not really want to leave - so addressing the issues in (1) will keep them as an employee.

(4) if the answer is no, then ensure they have resigned, accept their resignation, thank them for their work over the years and follow your companies normal termination process.

**If at some point, it becomes clear that they are making up the other job offer, then that is a conduct issue. They have acted in a way that completely undermines trust between employees and employer, and is considered gross misconduct in the U.K., and as such is grounds for being fired, without notice. Other countries interpretation may vary **

  • Great answer! Also, do you have any knowledge how (if) bigger companies do legitimacy checks (or not)? – TrevorD Oct 16 '16 at 10:53
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    If you made an offer to an interview candidate, would you really want to register that offer with a records agency for other companies (your competitors in recruiting this person) to see the details? – Michael Shaw Oct 16 '16 at 11:16
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    If I had just made an offer to a great new employee, why would I want to talk to their current employer so they can prepare a counter offer? Even on telephone calls for references, after it is meant to be a done deal, I would not pass on any info why they were leaving or any details of their new salary. Too much risk of a counter offer. – Michael Shaw Oct 16 '16 at 13:38
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    It is not necessarily correct that they have started looking for a new job and attend several job interviews. Before I started in my current position I was contacted by multiple headhunters and eventually did a single job interview after which I got an offer and accepted. That might not be the norm, but it happens. – kasperd Oct 16 '16 at 19:47
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    @kasperd Agreed. I resigned from my first professional position after receiving an unsolicited offer. No negotiation with that current employer though; just a simple resignation after a lengthy consideration. – user2338816 Oct 16 '16 at 23:31
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Your industry must have salary surveys. Look those up. If your employee is not being paid market value, those surveys will tell you.

As to double-checking the other offer, that's not your information to have. How would you feel the next time you interviewed someone, that person tried to find out who was their competition, and then went ahead and spoke with them. That would be totally unprofessional. Right?

The same goes for you. You can't get in touch with the other company making the offer. Use only the information you have at your disposal. And don't rely too much on what some other company is offering anyway.

That other company doesn't know your employee as well as you do. Only you know if your employee is worth the money he's asking. And if you need to double-check anything, use existing salary surveys for your industry to see if your employee's salary is in line with industry averages in your area.

  • Very good points, thank you! That is indeed not my information to have, but sure would be valuable. That is why I was thinking maybe some big companies have any tricks. But you are of course right! – TrevorD Oct 16 '16 at 11:58
  • Well, Intel has vans that secretly pick up the personal trash of their highest paid employees at their homes. Technically, this is legal, because trash is trash, but if you want your company to be known as a company that rummages through the trash of their employees, I wouldn't recommend it. And HP is known for hiring a PI firm to illegally get the phone records of journalists and of its own board members to locate a leak, but that didn't go so well for its CEO and that got her ousted. So that wouldn't be a strategy I'd recommend either, even if it could get you the information you wanted. – Stephan Branczyk Oct 17 '16 at 21:53
4

Assuming that this employee is telling the truth:

People tend to look for alternative employment because of more than one factor - i.e. money in this case. They usually look for alternative work for things like

  • money
  • daily commute
  • training opportunities
  • career prospects
  • change of scenery
  • etc.

So I guess there are other motivations that this employee is also looking for another job.

With this in mind, if you did pay him extra, how much longer will this keep him happy. Probably another year at best.

If this is a porky

You do not need to pay him extra. (s)he should have just asked for a raise and discuss that without a threat.

Either way it is probably time that it is time to move on amicably.

  • Thanks for answering! Do you have any comment to the legitimacy test in bigger companies? – TrevorD Oct 16 '16 at 10:52
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    You cannot test if it is true. Assume that you know the name of the company - would they release that information? Data protection etc. – Ed Heal Oct 16 '16 at 11:46
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    For non-cockney users: porky -> porky pie -> lie – Steven Penny Oct 16 '16 at 13:31
2

What keeps people from lying about another job offer in order to get a raise?

They are gambling with their income. If employee says the new place is offering a 20% raise and an extra week of vacation. But the current company says the best we can due is 5% now, 10% next year and flex time. How can they say OK sounds good I will stay. Of course the current company could also say, spend your last 3 days documenting everything, then turn in your keys.

I'm skeptical about the legitimacy of his offer. We are a small company, and I have no method of checking if this is a legit offer or not. Is it bad practice of me to try and find out?

I know of no way to find out. Some people have asked for a copy of the letter. But some question if that will work because the offer letter is sometimes labeled confidential, and the employee would be reluctant to show it.

There is no database of offer letters. There is no way to call a toll free number to check future employment info.

Employees are also afraid to show the letter, or even reveal the company name for fear the current boss will call up the new company and spread lies about them.

Does bigger companies have methods to handle such cases?

Bigger companies face this issue every day. Therefore they know the data about how quickly employees with offer letters eventually leave. They know anything they offer is generally a bribe to keep them around long enough to get them past a deadline, or to find a replacement.

Frequently they offer things that take time to happen: that special training class next year, or the next opening on the day shift. That way they cost nothing now, and they may never have to pay that price.

  • Very interesting, I know see it clearly from the perspective of a bigger company! Thank you for the great answer! – TrevorD Oct 16 '16 at 12:03
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    The counter offer might not have to be as high as the offer they got from elsewhere to keep them. Money is not the only factor which is important. If the employee was generally happy with their job and the only thing they were unhappy with was the salary, then a 5% or 10% increase could be enough to keep them. But if they were unhappy with something other than the salary, then offering them more money is at best going to keep them temporarily. – kasperd Oct 16 '16 at 19:56
0

When this question is posed the other way around, ie: "Should I tell my boss that I got another job offer and ask for more money, promotion, etc", I always answer with the following shred of advice:

Who you want to work for is nobody's business except for the person interviewing you.

I tell people not to try to leverage a pay, position or benefits increase with another job offer. All this tells an employer is that:

  1. The employee doesn't like working for them, for whatever reason
  2. The employee wants more money or benefits

At the end of the day, it's any company's interest to employ workers at a given salary relative to their skill, experience and economic factors. If someone leaves a company, 99% of the time, that company will find someone else with the same skill and pay them exactly the same as the last guy, and the replacement will be loyal to the company. However, it's in a company's best interest to nurture that loyalty by paying attention to salary data and compensating employees fairly. I would take a look at that data before making any decision.

In my opinion, the employee is either not very intelligent in telling you they are looking elsewhere, or they are trying to get you to say "Oh no, we need you!" and get a raise. The latter is more likely. Neither motivation is indicative of an employee I would want to keep, whether he's bluffing or not. I would let him go and replace him with someone who wants to work for you.

  • +1 (whoever downvotes, please give a reason for downvoting). Thank you for your answer! Well, maybe my employee wants to work for me, but is not satisfied with the pay? Maybe he did not look elsewhere, but was contacted by another company? What if this employee is particularly talented, and finding a similar replacement will be hard? – TrevorD Oct 17 '16 at 18:01

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