How to Turn a Job Offer Into Raise

Nothing improves your bargaining position more than a better salary offer from a competitor, but the offer can win you a raise or blow up in your hand.


After two years of a deep recession that put employees at a disadvantage in the job market, it can be hard to imagine employing the sort of career strategies and tactics that were common the decade before.

Few people talk about climbing the corporate ladder and holding out for more money; instead, common wisdom has focused more on lateral moves to secure companies, accepting smaller salaries and racing to snap up job offers before someone else does.

But even in a market that favors the employer, recruiters and compensation experts say human-resources departments are anxious to keep the employees they have and often willing to go the extra mile to obtain new top talent. One tactic, leveraging a larger salary offer from a competitor, remains an effective tool to promote your career and grow your income. And as the economy improves, so too should your willingness to employ this bargaining tactic.

Many businesses are already running lean and have retained many of the individuals they consider most necessary for success or survival, said Lisa Torres, a professor of sociology who studies employer-employee relationships at George Washington University in Washington, D.C.

“Key people – the ones that have the right skills or are involved in something that is key to a company or its future – still have a lot of leverage,” said Jay Edelman, president of Top 5 Data Services, a market-research company that helps large companies structure their compensation plans. “It’s not like a couple of years ago where a lot of industries were like finance, where it’s always been assumed you could walk across the street and get another job. But the weight hasn’t all shifted to employers.”

But leveraging a competitive offer can be a tricky and potentially risky affair, said several compensation experts and recruiters. You chance offending your current employer and risking your job; meanwhile, if the new employer views you as a mercenary, it may rescind the offer. A job seeker must know when to try it and when to back off; when she’s playing a legitimate hand and when she’s bluffing.

Try the new boss first

Approaching a current boss with what amounts to a threat that you’ll leave is never comfortable, and it exerts only limited leverage because you’re already on the payroll, Edelman said.

You can get more mileage from a competitive offer when you’re negotiating to take a new job, he said. With a new hire, the authority who approves salaries and benefits has already signed off on a specific salary number and on a range by which that number could change, depending on the candidate, Edelman said.

“By the time you’re negotiating, they’ve already vetted you and they have the money, and it’s a lot more likely they’ll say, ‘If it takes another $25,000 to get this person, let’s just give it to them and get on with things,’ ” Edelman said. “They might give it to you as a signing bonus or other one-time thing, but that’s when they’re going to be most open to those kinds of considerations.”

The key in that case is to articulate the factors that will make you happy or unhappy in a new job and use the leverage you have to structure the job in a way that will help you succeed in it, said Victoria Pynchon works as a mediator at ADR Services, helping other lawyers negotiate their way out of sticky conflicts.

“Being in a job where you don’t feel respected is intolerable, no matter what they pay you,” Pynchon said. “Having good associates can mean the difference between succeeding at something and keeping much longer hours to just do it adequately.”

The major drawback to this approach is that job offers of any kind are rare right now, and having two good ones simultaneously is even more uncommon.

“Is there anyone out there facing that?” Pynchon asked.

Approach your current company delicately

If you are going to use a third-party offer as leverage within your current company, start by considering how your employer will react. If you’re approaching your current employer with a competitive offer, the company’s performance and your treatment during the last 12 months should give you a clue to its response, Edelman said.

“Companies have been making a lot of changes in their compensation programs, not so much in salaries in most cases, but in smaller bonuses, higher thresholds to trigger a bonus, more limits on restricted stock options and other things,” Edelman said. “They’re putting in intelligent triggers so at certain levels you get this benefit not because you’re still here after a certain time but because the board decided they want certain kinds of performance (goals) and you’ve achieved those.”

“If you’ve been there more than a year and your compensation doesn’t show you’re on the positive side of that – more benefits, showing that the company really values you – you have to assume you’re not the highest value on the team,” Edelman said. “That doesn’t mean the company doesn’t value you; if you’re still there, it probably does. But your reception, if you go in with a competitive offer, may not be what you want.”

Prepare your demands

Before you ask a current employer or future employer to entertain a competitive offer, you should sit down and figure out what exactly you’re hoping to gain or change through negotiations.

What’s at the top of the list? “The answer to that, by the way, is never, ever, ever, ‘More money,’ ” Pynchon said. “More often it’s a change in the associates you work with, the kinds of projects you work on or your career path. When you make a list of things to negotiate about, don’t go in thinking about the money; list the other things first.”

Not only will your goal in the negotiation be one that’s more likely to make you happier and more effective in your job, a list of other potential changes gives your boss things to take off the table without stopping the conversation completely.

“Every piece of research has shown that the more you give up in a negotiation, the happier your negotiating partner is,” Pynchon said. “So having some things you can give up without too much pain will do a lot to help maintain that relationship.”

Be prepared for a conversation that may not go your way, however, and don’t invest so much of your ego in the numbers that you end up declining the offer out of spite.

Finally, don’t forget that if you’re doing well in your current position, your security might be more valuable than an incremental increase in compensation. “It’s almost always the case that you can (perform) better in a current job than a new one, anyway, so most of the time it’s smarter not to take the other offer,” Pynchon said. “But it’s hard for overachievers to say ‘no’ to another $100,000.”