Should you use a job offer as leverage to negotiate for a raise?

Should You Go Looking for Another Job Offer Just to Get a Raise?

Should You Go Looking for Another Job Offer Just to Get a Raise?

How to get ahead at work.
Dec. 2 2015 9:08 AM

How to Ask for a Raise

Should you line up another job offer first?

Woman at job interview.
In some industries leveraging job offers for more money is not only common but expected.

Photo by PhotoAlto/Eric Audras/Getty Images

J.’s first job out of college was at a media company “that made it very clear they had little money.” She quickly picked up from colleagues that “the only way to get a raise was to come with a competing offer.” So after a year of feeling underpaid, she began applying for jobs at other companies—intending either to change jobs, or to get an offer she could use as a negotiating tool.

L.V. Anderson L.V. Anderson

L.V. Anderson is a former Slate associate editor.

If J.—who didn’t want to be identified due to confidentiality agreements she signed with her employer—were to consult management and HR experts, they’d tell her that’s a mistake. As “Ask a Manager” columnist Alison Green writes, “Using another job offer as a bargaining chip may be tempting, but too often, it ends badly.” The conventional wisdom goes like this: If you threaten to leave, your boss will never trust you again. If you turn down the outside offer in favor of a counteroffer, you’ll burn bridges with the company that made you the offer. And even if you get the counteroffer you’re looking for, you’ll still be unhappy about other, non-compensation-related parts of your job.

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Alanna Miller, a senior associate at recruiting agency Chaloner, agrees. “The short answer from everything that I have seen is that it’s really never a good idea,” she told me in an interview. So does Kevin Fanning, the vice president of culture and talent at a Boston-area startup accelerator, who has worked in HR and recruiting for more than a decade. “I’m very wary of people trying to have you over a barrel like that with another offer,” he said. “It’s not a long-term solution for your career satisfaction.”

On the other hand, when Fanning tried leveraging a job offer himself, the results were hardly disastrous. He was unhappy at a company where his higher-ups did a terrible job of letting him know what they expected from him. “I wasn’t even really looking for another job, but I got another job offer that was significantly higher than my current one,” he recalls. “So I was like, ‘Hey, I have this other job offer and I’m going to respond tomorrow. Does anybody want to talk about this?’ And it forced them to have the conversation with me that I really wanted to have.” Fanning’s concerns about communication were addressed—and he got a raise.

I suspected that Fanning wasn’t the only person who’d leveraged a job offer without terrible repercussions. So I asked friends, colleagues, acquaintances, and random people if they’d ever tried to leverage a job offer for better pay or a better title. Most of them didn’t want to talk on the record, thanks to the stubborn taboo around talking about salary, but many opened up anonymously. Their feelings about the tactic varied widely—depending largely on their field.

In some industries, including media, leveraging job offers for more money is not only common but expected. “The only way I’ve ever known people to get significant raises at [my company] is through an outside job offer,” said a journalist who has used two job offers to secure pay increases. That isn’t to say your employer will necessarily match those offers—the journalist accepted a counteroffer several thousand dollars below the offer he’d gotten, because he preferred to stay in his current job. Similarly, a former advertising copywriter told me she once got a $30,000 raise after threatening to leave her agency. “It has long been standard practice in advertising to use offers to get raises—often to get counteroffers and then second counters from the new agency,” she said. “It’s a game.”

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Fanning and Miller both noted that leveraging a job offer into a raise is more likely to be successful if your job requires specialized skills— if you’re a computer programmer or a financial analyst, say. In those cases, employers “need someone who is the best at doing this specific thing,” says Miller. “If you already have that person in-house and you don’t want to lose them and you’re able to throw money at them, maybe you will.” Miller pointed to the case of an accountant who’d leveraged outside offers for more money at his firm on three separate occasions, without any hard feelings resulting. As for tech, Fanning says, “Within the tech startup world, there’s an arms race around salaries and money,” which makes companies willing to throw money at good employees to keep them.

This is the law of supply and demand in action: The harder you are to replace, the more likely you are to get a generous counteroffer. If there’s a low barrier to entry in your field, and hundreds of people who would love to do your job, it’s a riskier gambit. I spoke to a person working in the fashion industry who has repeatedly tried leveraging job offers for more money but usually ended up taking the offer and switching firms, because her employers saw her as replaceable. She didn’t mind. “I’m a big believer in moving onward and upward,” she said—a good trait to have when you work in a Darwinian industry.

But even if you’re not in a hypercompetitive field like fashion, there are times when trying to leverage an outside offer for a raise might backfire. In jobs associated with a sense of mission, threatening to leave if you don’t get more money is sometimes seen as poor form. Ruth, the director of a nonprofit, told me she advises against using job offers as leverage. When one of her employees threatened to leave if she didn’t get a raise, she says, “I definitely saw this as a sign that this was not someone I wanted on our team long-term.” She went on, “In the nonprofit sector we all assume that each of us could be earning more elsewhere anyway and that we’re each here because of our commitment to the organization’s mission … Bringing something up like this during salary negotiations could be interpreted as a lack of commitment to the mission.” (Ruth recommends that people who work in the nonprofit sector focus on their achievements and their enthusiasm and commitment when negotiating for a raise.)

There’s also the question of workplace culture—and your boss’s temperament. Adam Epstein, the president and COO of the search-engine marketing firm AdMarketplace, says he almost never makes a counteroffer when employees threaten to leave, because “an employee only takes the time and effort required to complete an interview process with another company if they are unhappy with their current position. My rule of thumb is that it’s best to let unhappy employees find their happiness somewhere else.” Joe Golden, the co-founder and co-CEO of custom-printing site collage.com—who also happens to have a Ph.D. in labor economics—made a similar point. Golden says he tries to pay workers more than market value, to reduce turnover and improve productivity. Being pushed to make a counteroffer on top of that “would give me longer-term concerns about if they’re going to stay or if they’re likely to do this again or just leave soon anyways.”

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But another software company executive has a different approach. He wrote in an email: “If I had a person who I felt was undercompensated (and who I wanted to keep) and that person brought me a competing offer, I’d do my best to match it, and if it were a substantial raise, I’d cover (for both of us) by adding in a change in title and call it a ‘promotion.’ ” In the tech industry, he wrote, “this is not an uncommon practice.”

So should you—or J.—try to leverage a job offer for more money? It depends. Do your homework before you start looking for other offers: Talk to trusted colleagues or friends in your field about whether they’ve ever used this tactic, or if they know people who have. Your contacts (especially people who know your workplace or your boss) will be able to let you know whether your gambit is likely to be successful. And consider your boss’s disposition. Is she pragmatic about money, or is she likely to take a threat to leave personally? If you suspect your boss will punish you for asking, you might want to skip the negotiations and just find a new job.

Getting a job offer is much easier said than done, but you know the drill: network, send out your résumé, get as many interviews as you can. Once you have an offer in hand, Miller recommends figuring out what you want before you go to your boss in search of a counteroffer. “So, you get an offer [for] 10 percent more than you’re making now, [but] you know that you would stay at your current company if they offered you 15 percent more?” she says. “OK, then that’s something that you want to keep in mind.”

The paradox of using a job offer as leverage is that you have to be at least somewhat sincere every step of the way. If you’re only applying for jobs to boost your negotiating power with your current employer, hiring managers will sense your ambivalence. Similarly, if you threaten to leave for a job you don’t actually want, your boss may very well call your bluff.

J. ended up playing her cards just right. After she’d been job-hunting for a while, “I did indeed get an offer, but decided I didn’t want the job. So I told [my boss] I did not want to leave but was being offered way more money to go to another company.” Given what she knew about her company, she was confident that she would get a counteroffer, and her bet paid off: Her boss almost matched the outside offer. If her boss had said no, she says, she would have taken the other job “or at least ramped up my job search.”

If you, like J., get the counteroffer you want and decide to stay at your current company, don’t worry about alienating the other firm. “There are people who have turned my company down for reasons related to money, and we would still love to hire them,” says Fanning. As with all things related to job negotiations, there are exceptions, and maybe you will end up inadvertently burning bridges. But if it’s a company that would punish you for advocating for your own interests, you probably wouldn’t want to work there anyway.

Need career advice? Got a problem at work? Email theladder@slate.com.