Thursday, July 3, 2014

Why Accepting a Counter Offer is Often a Mistake

Everyone likes to be wanted. One way an employer can communicate that to you is through a counter offer. A counter offer means that your company offers you a more attractive job situation. In addition to a higher salary or better benefits, the counter offer may mean a new position with more responsibility.

Accepting a counter offer is often a mistake for the employee. Consider this scenario:
·   Beth works at an advertising firm. She comes up with creative advertising ideas for her clients. She’s worked at Firm A for three years, and her clients appreciate her creativity. Firm A has several companies that are in the online clothing business. Beth really wants to work with those clients.
·   Beth approaches her boss, Rick, about working on the online clothing accounts. Rick puts off meeting with Beth for weeks, saying that he’s busy. When they finally discuss Beth’s interest in the online clothing work, Rick says he will try to shift that work to Beth. Two months goes by, with no change in Beth’s responsibilities. Rick doesn’t give any explanation for the delay.
·   Firm B approaches Beth about a creative advertising position at their firm. When Beth expresses her interest in online clothing firms, Firm B assures her that she will work on those accounts as soon as she starts. Beth accepts the position with Firm B.

Beth goes into Rick’s office to announce that she has accepted the job at Firm B. Rick realizes that he’s about to lose a valuable employee. He apologies for not following up on Beth’s request to work on online clothing accounts. He offers her a 20 percent raise, and assurance that she can work on the advertising accounts she prefers. Rick has made Beth a counter offer.

So, what does Beth do? This moment is important, because it can have a big impact on her career. It’s my view that accepting Rick’s counter offer (and backing out of the job that she accepted at Firm B) is often a mistake. Here’s why:

·    Impact at you current job: Consider Rick’s management style. He didn’t take action to meet Beth’s needs until she was planning on leaving. Is this a manager you want to work for? When another work issue comes up, will Rick take action? Beth also needs to consider that Rick may not talk with Beth about future promotions, since she accepted another job and backed out. In his mind (rightly or wrongly), Rick is wondering whether or not Beth will stay for the long-term.
·    Impact at Firm B: If Beth accepts the job at Firm B and backs out; her credibility with the people at that firm is damaged. Management at Firm B may not consider Beth a candidate for future positions, since she backed out of a job she accepted.
·    Working with all parties in the future: Obviously, people who work in a given industry move from one company to another. Years down the road, Beth may interview at a firm that employs people from either Firm A or Firm B. If those people remember Beth accepting the counter offer, they may not want to interview Beth.

So, what’s the best way to handle this issue? Unfortunately, there’s no easy answer. However, backing out of a job you’ve accepted may be worse for your career than sticking with your original plan and taking the new job. In this case, Beth’s better alternative is to stick with the job at Firm B and resign from Firm A.

Beth’s meeting with Rick may be difficult. Rick may get upset, because he’s losing a valuable employee. He may also realize that his poor management led to Beth’s departure. Beth’s best approach is to thank Rick for the opportunity to work at the firm- and also tell Rick that her mind is made up. She may want to mention that it would not be fair to Firm B to back out of a job she has accepted.

The good news is that Beth should be happier in her new job. If she can get through her conversation with Rick in a professional way, she will move forward successfully in her career.

Let me know how I can help!
Ken Boyd
St. Louis Test Preparation
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies and The CPA Exam for Dummies (Sept. of 2014)
 (amazon author page) 
(cell) (314) 913-6529
(you tube channel) kenboydstl
(facebook) St Louis Test Prep
(twitter) @StLouisTestPrep
(linked in)
Author:, Personal Finance Fundamentals (Summer of 2014)