October 1, 2019
5 ‘Must Ask’ Questions After A Life Changing Counteroffer
by Scott Thompson
What if I said your employer will triple your salary so you don’t leave your job? You’ve been looking at new career opportunities for months. You’re frustrated and one foot, if not both, out the door. You find a perfect new job and work up the nerve to resign.
Then comes a counter. Not just $5k. Not even $20k. Somewhere between $50k-$200k is the number putting in front of you to stay. This extreme, life changing counteroffer is a strategy insurance carriers and brokers use with greater frequency in today’s talent crunch. Companies will do ANYTHING to avoid the following:
- A long vacancy in a job market with 3% unemployment
- Training someone new to fill your shoes
- Watching you go to a competitor
Insurance is a notoriously conservative industry notorious. When I’m seeing 2x and 3x salary counteroffers consistently over the last 12-18 months then you know something big is happening.
1. Can My Company Truly Make This Work?
Insurance is an easy industry to validate. Based on the revenue of the portfolio, can they afford to pay you (producer, account manager, executive, underwriter, etc.) equal to 2-3 employees?
Companies and employees feel the effects of huge counters. Moves will be made. Responsibilities will shift. Colleagues will find out. Opinions and expectations will change. Are you prepared for this? Can everyone survive the financial hit?
2. Is It Legal?
Pay equity and pay transparency aren’t fluffy concepts to promote culture. Many states have laws that protect employees from abusive and discriminatory employment practices.
- Can and should your employer offer this pay increase?
- Does it create a discriminatory situation based on who you are and who others are (age, gender, ethnicity)?
You may not be legally liable for receiving such a huge counter, but you may face internal backlash for the perceptions surrounding your employment versus others of equal or greater position.
3. Can I Get This in Writing?
Playing off the last thought, often hiring managers make promises as a knee jerk reaction to your resignation. They do so without consulting Human Resources or upper management. Why? Because it’s easier to ask for forgiveness than permission. What’s more difficult is breaking a written contract. Get the counteroffer and all the fine details in writing.
4. Will I Be Treated Differently?
I’m yet to meet an executive who likes to be backed into a corner. Counteroffers are reactionary and put people accustomed to being in power on their heels. Even if the counter is presented cordially, you must anticipate how their feelings towards you will change after the dust settles.
Can you imagine your boss thinking or articulating the following: With the money we’re paying, you should:
- Not take as vacation or time away from the office
- Be open to a more rigorous travel
- Not complain about long hours, weekends or work-life balance
- Be willing to take on significantly more duties
- Be able to solve internal problems and interpersonal conflict
5. How Could This Affect My Reputation?
“My salary is a confidential, private matter.” That is a great and noble thought however people take notice when you resign on Monday but by Friday have decided to stay. Big counters are office gossip waiting to happen.
- Would I be embarrassed or ashamed if colleagues found out my new salary
- What if someone else loses their job to keep mine? What would people think then?
6. Is the Target on My Back?
This is my final thought. Do you know the true reason companies make counteroffers? It isn’t because they like to keep people. Companies make counteroffers because they know 80% of employees who accept counters still leave within 12 months. By getting you to stay, they have financed a recruiting project. Your $50k counter is not $50k deducted from this month’s budget. It’s $2,083 per pay period. So, for $4,000 more per month they can have you doing your job and look for your replacement.
So, these are all things to think about when a company makes a life changing counteroffer. Is it worth it? I can’t make that decision for you. That said I would keep your recruiter’s phone number handy. Additionally, be a saver not a spender. If you do end up moving, it is likely that you won’t make the same income at your next job.