Leveraging a Job Offer to Get a Raise
The other day I got an excited phone call from a client who had just received a job offer from a company she'd spent several months interviewing with. She wanted to know if she could parlay her offer into a raise from her current employer. I suggested that she carefully consider the following before choosing a course of action:
The New Opportunity
Is the new opportunity truly worth the risk of leaving the job you know and are comfortable in? Changing jobs involves a certain amount of risk. I always advise clients to make a list of pros and cons to determine if the new role aligns with their values and long-term goals. Remember that presenting a counter-offer to your current employer is a risk that only makes sense if the new job opportunity is one that you'd actually consider taking.
People are motivated by different things. For some people earning more money is the priority, for others it's status or the opportunity to learn and take on additional responsibility. When assessing a job offer against your current job, you need to identify what is most important to you right now. Only discuss a job offer with your current employer if you would sincerely consider staying. Few things would be worse than your boss successfully advocating for your raise, only for you to decide that you're leaving anyway.
Keep in mind that what's going on in your personal life plays a role in this decision. For example, if you're going through a messy divorce, you might need more personal time and less demanding work while you sort things out. You're more likely to get this leeway at your current job where you have a proven track record, an established reputation, and colleagues who support you.
The likelihood that you'll be able to use a job offer to negotiate a raise from your current employer has everything to do with your relationships with your boss and colleagues. If you have a manager who will go to bat for you, discussing a job offer can be effective in helping you get a raise. Also, you can discuss the offer in terms of how it will help you achieve your career goals. By having an open, candid conversation about your aspirations with your manager, you increase the likelihood of having your needs met.
Understand Your Market Value
Sites like Payscale and GetRaised offer great insight into current salary ranges for specific positions. You might be surprised at what you learn about salaries in your field by talking to peers, mentors in the field or recruiters.
I worked with a financial services client who had received an offer from a competitor for $375k. She used the techniques I taught her to counter their offer at $950k. The firm's best and final offer was $850k. Although her current employer couldn't match that, they offered her a 40% raise and a promotion. She ultimately decided to stay at her current firm because it offered her more opportunities for advancement.