
On Counter Offers - JasonPunyon
http://jasonpunyon.github.com/blog/2012/05/17/on-counter-offers/
======
potatolicious
I feel like the author has severely overreacted here.

Counteroffers are a fact of daily life with most corporations, there's nothing
malicious nor personal about them. A ludicrous counter-offer means the company
has severe managerial issues and has allowed someone to become absolutely,
non-negotiably indispensable.

IMO perceiving the counteroffer as "buying off his dreams" is a huge
overreaction, and in my various jobs has never been a malicious move. Your
boss is trying to save his bacon, not destroy your dreams.

The author does nail one point, but for the wrong reasons:

> _"So some of these offers are just plain “keep them in the building while we
> find a replacement who’ll do the job at the price we were paying.”"_

That's exactly what these counteroffers are. Very few counteroffers are
serious counteroffers (serious as in they will keep you on indefinitely at the
new salary). Management is going "oh fuck, how did we let this guy become so
critical" right now, and as soon as the immediate crisis of you leaving is
gone, they will attempt to replace you. You'll be out on your ass as soon as
they find/train that someone.

I've had this exact thing confirmed by multiple HR folks I've known, all off
the record of course. They admit that they explicitly get asked by management
to organize a "manage-out". Hell, this sort of thing is bog-standard for most
large HR departments.

> _" Companies don’t just allow their managers to get slapped around and make
> outrageous counter offers to people. Budgets and HR minions can’t stand
> that. The manager gets dinged by the higher ups because she’s “lost
> control”."_

This seems like where the author is off the mark. In my experience no HR
person nor upper-management exec has to chase your boss down to push you out.
Your boss already has every intention to manage you out as soon as he drops
the counteroffer on the table. Especially when the offer is 2x your salary.

~~~
delinka
If you get a ludicrous counteroffer, it's probably the perfect time to also
get a severance package if you don't have one or get an increase in severance
if you do.

~~~
joezydeco
Wow, I never thought of that.

I'm heading for a situation that will most definitely result in a counter-
offer and my thoughts were to ask for an employment contract to lock in my
time and terms so I don't get backstabbed a few months later. But my problem
was how to generate and finish the contract before losing one (or both) jobs.

Severance seems a lot easier to get in place and locked in. Does anyone else
have experience with this?

------
fatjokes
Congrats on your job and all, but I don't think a counter-offer with a raise
should be taken as the action of a "skeezy jerk." It sounds like a reasonable
reaction to losing a good employee.

Financial considerations are a significant part of a lot of peoples' reasons
for working where they do. Some may even use job offers as bargaining tactics.
If you were working at a hedge fund, obviously finances are at least part of
your motive. So perhaps your boss merely sought to play to that.

~~~
famousactress
I disagree that it's at all reasonable.

The only reason to make a counter offer is because at least one of the (major)
reasons an employee is leaving is money (and that's basically never the
reason). People leave because it's not a fit. Money isn't going to make it a
fit, so as a manager giving a counter-offer, if you know what you're doing..
you're buying time. Hoping the employee will take the offer and you'll figure
out how to make them less important to you over the next N months. That's
skeezy. Otherwise you don't know any better. You're a shitty manager and
you're out of touch. It doesn't occur to you that you already have a team
where your best is leaving, and now you'll spend the next N months making your
best even more bummed out and less productive (especially since they're
suddenly in the position of realizing how much leverage they have with you).

The whole thing is sad and terrible. If you're a manager and this happens, let
it. Then turn around and figure out what your remaining employees need to be
happy and fulfilled.

~~~
potatolicious
> _"Money isn't going to make it a fit"_

But yet, for many people, it does. In the grand scheme of all programmers (or
any profession, for that matter), only a minority are doing it for the sheer
passion of it. Most people are in it for the paycheck, and if they can get a
larger paycheck without taking a substantially worse job... That's a sweet
deal.

~~~
famousactress
I don't believe this at all. Put another way: you're exactly right, but I'd
combine two concepts you separate.

Everyone is working for passion/happiness. There's the net awesome that you
get out of solving problems and building value at worth, and there's the net
awesome that you buy with the money they pay you.

One way to look at it is that it all goes in the same pool and plusses-and-
minuses until you have some score of how awesome your days tend to be.

I think that's the only reasonable way to look at it, and I don't buy the
'some of us are just working stiffs' bit that gets dropped into these threads
on HN. I think more accurately, it's just generally speaking really hard to
find an awesome job and eating and sleeping (under drywall) is expensive... So
for lots of folks salary dwarfs work environment in priority.

The sad thing is that the comparison is generally done in a speculative
vacuum. It's very easy to imagine what would happen if we made less (or more)
money. That's pretty simple math. It's much harder to evaluate the benefits or
drawbacks of a different work environment on our lives. Challenging math.

Oh, and that was a total tangent... to the point, in my example the employee
is leaving for reasons other than money. So the premise kind of is the
conclusion there. I was just being redundant. It's just a logical redundancy
that lots of people in this situation seem to miss. Dollars do that.

~~~
mattdeboard
> Everyone is working for passion/happiness.

By "everyone" you clearly can't possibly mean "everyone."

~~~
Zakharov
No, everyone - either for the passion/happiness of the work, or the
passion/happiness gained from the pay. Even having food to eat is a small
happiness.

------
jonamato
Counteroffers get made all the time - I've had at least 3 made to me in the
past, including one for an interdepartmental transfer within the same company
(!) Accepting a counteroffer is staggeringly stupid for a number of reasons,
but I just can't comprehend why the author would get so offended that one was
made in the first place. Answer "no" and move on, easy.

------
SoftwareMaven
As a manager, I will almost never make a counter offer. If somebody has gotten
to the point of a job offer elsewhere, their head will be out of the game.
While money may have started the job hunt, as time has gone on, they've found
a dozen other things that are driving them crazy. Those don't go away with the
counter offer and will eat away at them until they wind up leaving anyway
(with poor performance in the meantime).

The only time I'll consider a counter offer is if 1) the engineer really is
good and 2) they don't really want to leave. It's a judgement call and I've
only chased somebody once (successfully, I might add).

~~~
manmal
If there really are so many things that drive employees crazy, then
something's wrong anyway. There are many people who don't complain about stuff
in the open, but get fed up more and more until they just quit - perhaps
without telling you the reasons at all. Apart from such peoples' quirks,
culture often discourages criticism for all employees. There are many
possibilities to avoid such situations, but the one I like best is described
in Tony Hsieh's book about Zappos: a public culture book which is basically a
report on what goes good and wrong in the company. It's foolish to believe
that people most often leave for the money - I'm quite sure that 50-80% of
quittings are due to crappy culture and its consequences (e.g., too small
monitors :)).

~~~
SoftwareMaven
There may really be something wrong culturally (I try hard to prevent that,
but some things are out of my control), but, especially when there isn't,
people feel the need to have a _reason_ to leave, a reason to bail on a
project, potentially causing extra stress to people they like.

To assuage these feelings of guilt, people start identifying and magnifying
things that would never have bothered them otherwise (such as "why does
management only value me when I threaten to quit?"). Once those seeds are
planted, it is a steady progression towards exit from the company. I'd rather
the engineer take the new job and find somebody who is excited about my
opportunity.

There are no absolutes in management, though. Like I said, I have chased
somebody back into the company who was in his last days with an accepted offer
elsewhere.

The real key is to make it so your toxic employees want to leave and your
fertile employees have no desire to answer te headhunter call.

------
chaostheory
> This counter offer reeked of skeeze. He was trying to buy my dreams from me.
> When someone tells you “I’ve been given the opportunity to live my dreams,
> I’m leaving” the decent human thing to do is to congratulate them and send
> them on their way. (With a security escort out the building, of course. You
> dont know what these dream heads are gonna do on the way out.) What you
> don’t do is tell them you think so little of them, their lives and their
> goals that you think can buy them off.

Personally I don't feel that they meant any disrespect. They're just desperate
to keep you longer. It is hard to find good developers.

~~~
swang
It is a sign of disrespect. If they actually thought of the author as a good
developer or good <whatever X> position is, they would have already paid him
the 2X salary increase beforehand, or at the very least not gone to war over
what the author calls a "pittance" of a raise relative to what he was earning.

While it's true that they're desperate to keep him longer, it's because
they're trying to stall, not because they think its a good developer.

~~~
chaostheory
It depends on how large the company is. A big large corporation has a lot of
protocol and rules for determining raises.

At some of the past places I've worked, the best raise you can get is 10%.

> While it's true that they're desperate to keep him longer, it's because
> they're trying to stall

This is most likely true.

Based on the anger in his post, I'm guessing the real wrong was done in the
past. It didn't seem like he was treated well. I still don't see the counter
offer as bad. If anything it's flattering.

~~~
notaddicted
If an inadequate raise (thus inadequate compensation) is a sign of disrespect,
then creating a rule which causes inadequate raises is institutionalizing
disrespect. What I'm trying to say is, it isn't better, it's worse. By
creating pre-commitment not to give raises in excess of a certain amount, if
they make it more expensive for them to do so.

quoting: ``Here we find the manager striving to achieve his goal by
eliminating opportunities, contracting his set of alternatives, although
discussions of bargaining often rule this out axiomatically. [...] The
resolution of the paradox is that the manager, by his tactic of "tying one
hand behind him" hopes for a favorable effect on his employee's
expectations.``

from The Theory and Practice of Blackmail by Daniel Ellsberg
([http://www.rand.org/content/dam/rand/pubs/papers/2005/P3883....](http://www.rand.org/content/dam/rand/pubs/papers/2005/P3883.pdf)),
I swapped blackmailer/manager and victim/employee. The document is a really
insightful take on negotiation I think except for the fact the it used the
loaded terms blackmailer/victim.

There are plenty of organizations which are unable to recognize and/or reward
high performance, and plenty of organizations which create compensation plans
as if employees were fungible with infinite supply at their set salaries, and
then depend on the psychological comfort of certainty and corresponding fear
of the unknown to retain the workers, so although it isn't rare or even
uncommon, that might be the sort of thing that made him angry.

------
orbitingpluto
I'm the proud recipient of getting that 2X raise, but not until I gave two
weeks notice. (Former attempts to get a raise resulted in regular 0%
increases.)

I agreed to stay for four months more. I knew a 2X raise couldn't win against
my psyche forever. But it was nice to finally get that formal sign of
acknowledgment.

(Former signs of acknowledgment - aka monetary bonuses - sat in my direct
manager's desk. He never felt the need to pass it on until it became apparent
to myself and the person who directed it that I had not yet received it.)

I don't know about the skeeziness of the writer's boss, but my mine sure was!

------
furyofantares
It's possible the 2x offer wasn't really that ludicrous. Any time in my career
when I have felt I was paid more than could be considered reasonable I have
been proven very, very wrong. I think our culture of hidden salaries combined
with savvy hiring and compensation practices make it very difficult for a
person to understand how much value they provide and how much it costs to
replace them.

Also consider that there are companies that are always hiring developers. They
aren't filling roles, they are just looking to hire anyone capable that they
can. Of course their demand is actually finite but reaching it in the current
market is inconceivable. These companies can afford to pay whatever value you
add, salary is dictated only by their demand for good engineers because it
dwarfs the supply. Good engineers aren't actually replaceable for these
companies, if they could find a replacement they would want to retain both.

------
tehjonz
Counter offers are a way for the company to buy time while they find your
replacement. Why not pay 2X if it means keeping things running smoothly? It's
still a LOT less than the actual impact of your departure on the business.

Counter offers never work out in the long term. Now that you've put in your
notice, you're no longer seen as loyal. Therefore, had you accepted (bad idea)
they would not have kept you around any longer than absolutely necessary.

Even so, trashing your former employer after they offer you more money,
however self-serving, is bad business.

I would not hire somebody if I saw them bad mouthing a former employer. What
if they don't like my company? When they leave, they're going blast my
business for not recognizing their genius/value/divinity earlier? Not good.

~~~
ianthehenry
Nowhere in the article does he mention who his former employer is. He vaguely
implies that it's a hedge fund, but there's more than one of those. This isn't
an article lambasting a particular company; it's about counter-offers in
general.

~~~
davidcuddeback
Maybe he doesn't say it directly in the article, but look at the page title to
get his name (Jason Punyon) and then search for his LinkedIn profile
(<http://www.linkedin.com/pub/jason-punyon/13/396/a89>) and you can be
reasonably confident that he's talking about DKR. That's not very anonymous.

~~~
throwaway20398
My anti-procrast settings kicked in after posting the comment above, but I
wanted to add this update. He actually links directly to his CV from that
page: <http://careers.stackoverflow.com/jasonpunyon>

According to that CV, the employer was Bigger Hedge Fund.

Kinda a funny coincidence that there's another person with the same name on
LinkedIn who also recently quit a programming job at an investment management
firm and lives in the NYC area. Anyways, the fact that he links directly to
his CV makes it even less anonymous who he's talking about.

~~~
JasonPunyon
Those company names are anonymized (except for my DBA and Stack Exchange).
According to that CV I've worked at "A Management Consulting and Reinsurance
Company", "Big Hedge Fund" and "Bigger Hedge Fund".

~~~
marvin
I always assumed that these kinds of anonymizations were to protect your
former employer, but apparently it goes both ways. Thanks for the tip.

------
focusaurus
So here's a question. If one was satisfied/interested/liked/whatever their
current job, but thought they were truly earning significantly more than their
salary, is there any good tactic to start the discussion with management (or
drop hints or whatever) without dropping the "I've taken another job" bomb,
which as many point out is pretty much the end of the relationship right
there?

In my own experience, I've gotten a large "retention bonus" after many of my
peers quit. However, this was just dropped on me without any request or action
on my part. It was a preemptive "oh God please stay at least until date X",
but I didn't have anything to do with causing it directly. It was just
smart/panicked managers buying insurance. And it worked. I happily stayed as I
wasn't quite to the point of being ready to leave yet, so I stayed till that
date and then through the next end of year bonus and then gave notice Jan 2.

~~~
jreeve
Just being honest has worked for me.

I'm a freelancer, and over the last couple of years I've transitioned over
several positions. It is much easier to negotiate a new salary when you have a
job offer in hand, though I've never taken a counter offer.

It helps to know that there is usually a large-ish cost in acquiring a new
hire that most folks want to avoid... and that just because you have a job
offer from someone else you don't necessarily have to take it.

The last two clients I worked with were quite flattered when I asked for a
counter offer, though because a) I'm still kind of new as a developer and b)
it's my second career neither of these folks were paying half what my new
offer was neither could really match the newer offer.

Perhaps it would be different if I were a w2 employee (and I believe that I
only have one or two more transitions to make before I top out at what I can
effectively earn, though I am quite good at what I do).... but having a job
offer in hand doesn't mean that you can't or shouldn't specifically ask your
current employers to make a counter offer.

------
Raiderrobert
Didn't read through the comments very thoroughly, but I saw someone mentioned
that companies use counter offers to get employees to stay around just long
enough for them to find the replacement and then fire them.

It sounds silly. It sounds paranoid. It sounds like something out of a cheap
novel. But I have done research for an executive recruiter for over two years
as a side job, and the statistic he quotes me is this: "Within 6 months the
person who accepts a counter-offer is gone."

The reasons are many for why that is. It's not always the sleaze bag just
trying to buy uninterrupted productivity. Often, the person is like the
original writer said: absolutely miserable.

Regardless never accept counter offers. Ever.

------
mag487
I agree with the author that getting a ridiculously generous counter offer is
a red flag about the company's management, and this alone constitutes a reason
to reject the proposal. However, his moral indignation at the thought of being
paid more to defer work on an activity he cares more about is misplaced. It's
silly to frame the negotiation as the company intentionally trying to "buy off
his dreams." Most people have a variety of "dreams," many of which can be
better achieved by having more money. As far as the company knows, doubling
the author's salary could let him achieve the alternate dreams of getting out
of debt or buying the house he's always wanted.

------
erikb
I never thought about counter offers as "buying my dreams off". For your
managers you are probably mainly a resource like the computer you are working
on and the coffee machine in the kitchen. For them you are a machine that eats
"benjamins" and spits out code. If the code you spit out is good they are
willing to feed more "benjamins" and if it's not they throw you away. They
don't care about the dreams their printer might have, why should they care
about yours?

I think you should understand yourself in this way and you will see that there
are also a lot of options for you.

I mean, if you are good enough, that Joel wants to hire you and your old boss
offers you 2 times your old salary (I never even heard about such an offer),
you must be good enough that most companies want you. So you can still work
for Joel later on. You might also be able to work for Google or Facebook
(applying would be worth find out about that, wouldn't it?). You can tell your
old boss your requirements for your dreamjob and you can ask Joel for the same
number on your first paycheck.

My point is, you don't have two options: "money" or "dream". You have a wide
range between them and can find out how much you can get of both. Be more
flexible, Jason!

------
mkramlich
Offering to pay 2X is probably a bad sign. Because it means they think you'd
be worth that. But they weren't already paying you that. Which means they were
underpaying you before. Which is not nice.

~~~
jrockway
Your market value is what someone will pay you. Before you had the offer, you
were worth what your job was paying you. Now, after the offer, you're worth
more. Simple economics.

~~~
praptak
"Simple economics" is an oxymoron. Theory of value goes far beyond the market
price as the final judgement of value.

On even a higher level, economics just describes possible outcomes of a game
under a set of rules. It does not prevent us from using our own judgement of
fairness on the rules themselves.

~~~
gruenewa
I have always thought, your market value is what someone will pay you. Why do
you think, it isn't that simple?

~~~
klodolph
That's only half of the market.

If company A is willing to pay you $100k/year, and you won't work for less
than $120k/year, what's your market value?

Maybe you wait a few weeks and get an offer from company B for $140k, and you
negotiate it up to $160k. The manager was willing to pay $180. Meanwhile,
company C wants you for $200k, but you never sent them your résumé.

What's your market value?

(You have poor liquidity, so it's hard to figure out what your actual market
value is. Market value is the estimated salary you'd actually get after a
negotiation, which is usually going to be above your minimum salary and below
the maximum offer. Your actual salary is only one more piece of data you can
use to figure out what your actual market value is.)

------
jarjoura
On the one hand it's an ego boost to feel they want me to stay. "Okay, I must
be doing something right."

On the other hand, I'd be more insulted that they think I'm actually worth 2x
what they are paying me now, but weren't.

Ultimately, I think you did just fine following your dreams. Good luck! :-)

------
soup10
It's interesting how money clouds people's judgements. I don't see the
counter-offer as offensive, I would take it as a compliment that they really
wanted to keep you(of course it stings to know that you were probably
underpaying you while you were there, but that's how businesses work they pay
you just as much as your worth).

Also, you should always negotiate when you get a job offer. Remember the
employer has tons of expenses to have you there and a few thousand more per
year is relatively little to them, but significant to you, the worst they can
tell you is that's the best they can offer. Any employer that would take
offense at an attempt to negotiate is not worth working for.

------
Tichy
Don't sell your dreams - OK. But really, your dream is some job at some
company (even if it is touched by Joel)? I hope you are not in for some big
disappointment a few years down the road.

------
K2h
this happen all the time. if employee accepts more money to stay, the company
is given time to backfill the position, and in the best case for the company,
this employee can train their replacement... probably without knowing it.

if you accept such an offer to stay, the company knows it is about money, and
that you are a flight risk because as soon as a better job comes along you
will be gone. the funny thing is, most everyone would leave for a better job,
but by going through this back and forth you will now have a target on you
(company now realizes how critcal you are to the busness and will work harder
to cross train)

I have seen this from both sides, and the author made the correct decision to
walk in my opinion.

if some project needs finishing, negotiate a part time contractor stint, if
you feel really really nice.

------
Tyrannosaurs
I was chatting to a recruitment consultant a while back (we were hiring rather
than my looking) and they were saying that something like 90% of people who
accept a counter offer leave within a year. If you're unhappy somewhere unless
money is the reason you're unhappy, a counter offer (assuming as most are it's
just financial) isn't going to change that.

The only way you should consider a counter offer is if it really addresses the
reasons you're looking to leave and you really believe that they'll deliver on
it.

------
Newguy123
The job of management is to get the job done at the least cost. It is a little
drama queenish to call that sleazy - it's the way job is done.

I have moved in the past for more money - and I have never been worried about
finding another job. I also have a huge history/legacy in the past company. I
would have gladly stayed if they gave 2x. The catch was that they were already
paying through their nose and they didn't have the headroom without promoting
me levels. It happens.

------
drx
If I were Joel, I'd be proud someone rejected a 2x raise to work for me.

~~~
miahi
That 2x could be lower than what Joel would pay.

------
markokocic
As long as offering counter offers provokes a mixed feelings (as shown in this
very HN thread) it is a valid strategy to try in order to keep employee until
they find/train a replacement.

------
codeonfire
A good policy is to never take a counter offer for the reasons described in
the article. However, there's no harm in coming back in a couple years at that
2x salary and a promotion.

