Hey folks, welcome back to my weekly newsletter.
This week's edition is about the counter-offer.
To be specific, it’s about the raise or promotion your company suddenly offers the moment you try to leave.
It is one of the most flattering moments of an early career.
You walk in to resign, and instead of letting you go, they scramble to keep you by offering you more money, a better title, a promise that things will change.
You really think you’ve won and you should stay, but should you?
That's what today's edition is about.
A counter-offer is not really a reward. It is information. It tells you two things: what you were worth to them all along, and how long they were quite happy paying you less than that while you never said a word.
Once you see it that way, the flattery loses some of its shine.
That’s a decent amount and the reason it happens so often is because the reason you started looking for another job usually was not the money.
McKinsey's research on why people quit found the top reasons were things like no path to grow, work that felt meaningless, and a manager who did not care.
So more money just buys back your attention for a few months, and then the same frustration that made you update your CV comes back, except now you are a little richer and a lot more stuck.
So remember, a counter-offer is usually made for the company's benefit, not yours.
Against that, a 20% bump to keep you is cheap in comparison and also gives them more control on how to manage you.
But to be fair it also changes the way the people who manage you end up treating you.
The moment you have tried to leave, they remember it. Fair or not, some part of them now files you as someone whose heart is already halfway out the door.
Similarly, psychology plays out in our heads too.
We feel a loss more sharply than an equal gain, so walking away from something familiar, even something you were unhappy in, sets off a real fear, and the raise gives you a nice excuse to avoid it.
If the answer is "you resigned," then this was never recognition or even a number they think you’re worth, but rather a cost they’re willing to spend to keep you for another year.
If you are still unsure after that, here’s a test I would use. I call it the STAY test, where you mark each of these questions between 0 and 2 (and none of the questions include salary intentionally)
Does this offer fix the reason you started looking? Zero if they only threw money at it. Two if the manager, the scope, the growth, is changing.
Is the change concrete and documented, or a verbal "things will get better"? Zero for a promise. Two if it is in writing, with a date on it.
If the new offer vanished tomorrow, would you still want to stay? Zero if you are only staying to avoid the leap. Two if you would stay on the job's own merits.
Can you stay without becoming the flight risk? Zero if the trust is visibly dented. Two if the relationship genuinely holds.
Add it up.
Six to eight, stay. If it’s between 3-5 then you’re making decisions based on fear and if it’s below, you have your answer.
And keep money out of the score on purpose.
A counter-offer that only matches your outside number usually still undershoots what the market was willing to pay you, so a raise on its own should not move a single point.
Now let me be fair, because I do not believe in never.
To be fair, if money genuinely was the only issue you had at the org, this might solve what you wanted, though it is worth asking why it took a resignation for them to notice.
And if what they fix is the actual thing that was wrong and they put it in writing, staying can be right.
Just be honest about which of those is true, and which is the fear of change wearing a nicer suit.
So take that away from them by telling your manager plainly where you want your pay and your role to be a year out (every 6 months or year), while you are still happy and before there is any drama.
Do that, and there is very little left for anyone to counter.
Hit reply: have you ever accepted a counter-offer, or turned one down? What happened next?
I read every email.
Swati