Career, Personal Finance 

Switch Jobs for 20% or Stay for 20%

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Let me paint the scenario: You interview for another job in another company and are offered a 20% raise above your current salary. You return to your current employer and ask for the current company to perhaps match that offer. They do. You’ve been at your current company for three years and feel you’ve built up somewhat of a name for yourself. Both companies are in the defense industry. For all intents and purposes, everything else is the same…. what would you do?

Personally, I’d take the 20% at another company mostly because after you get an adjustment at your current company for 20%, you’re put far past the other employees in your organization. You probably can’t expect sizable raises for a few years, whereas if you start “clean” at a new company, you’re not making more than your market value and so you won’t be penalized.

Now add into the fact that the people you work with know you received another offer and so in order for you to stay, you likely got accelerated on the pay scale, which is like to engender some spite. Also consider the fact that your original company does value people who leave and come back (more varied experience, plus you demonstrate value by virtue of the fact another company is willing to pay to acquire you).

What would you do?

{ 13 comments, please add your thoughts now! }

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13 Responses to “Switch Jobs for 20% or Stay for 20%”

  1. Carl says:

    My question is why did you interview in the first place with the other company? Are you some how unhappy with the current position, will money fix it? If managment was a reason to look elsewhere, I doubt that changes when they match your offer, will you be happy? FI your unhappy with the current situation, then take the other job.

  2. Henri says:

    This happened to me a few years ago. I chose to stay. In retrospect, it was the right decision for me because I was just starting out in the industry and I felt that my current postion at the time offer more mentorship and sort of a “safety net”. However, if the same situation arose right now, i would take the new job; Mostly becaue i believe that if you’re looking for a new job, it means you’re not happy with the current one. And you’re right in saying that It does accelerate the payscale and you won’t get a significant raise for a few years.

  3. Rich Slick says:

    There are many variables missing here:

    1. Are benefits equal? (401k match, healthcare, tuition reimbursement, offer college scholarships for your kids?)
    2. Are there stock options involved?
    3. can you get accelerated 401k contribution status at the new job?
    4. Will you be managing more/less people (if management job)
    5. How many layers of management at new job would there be above you than now?

    If all things were exactly equal as they are now I’d probably stay because you have more seniority, you likely have more vacation time (after 3 years I get 4 weeks), you likely are vested in your 401k 100% after 3 years and your earnings will continue to grow.

    This all assumes you have good relationship with your current employer and they won’t be bitter that you were looking.

  4. Mike says:

    As others have mentioned there could be other important factors here, but with the information presented and all else assumed to be equal, I’d probably go to the other company. The primary reason would be that you’ve basically injured your relationship with your current employer by announcing you were leaving. They may want you to stay to avoid the pain of replacing you and filling the hole you would be leaving on your current projects, but I doubt they would continue viewing you as a “loyal” employee. Your chances of future promotions and being put on the most important / best projects would probably be limited, because they wouldn’t want to risk having you jump ship on them again.

    Maybe none of that is true in this specific case, but I think it would be a logical attitude to have as an employer. If one of my employees was ready to leave, they are more likely than other employees to do so again.

    By going to the new employer you’re starting fresh with them, and they can plausibly believe that you’ll like working there better and be that “loyal” employee. They won’t have the baggage I described above.

  5. Dus10 says:

    I do not know about everyone’s experience, but I would think that staying may be a bad idea, unless you feel very comfortable with the current (in which case, why did you interview elsewhere?). I have known employers that would match the offer, let you hand around for a couple months (so, they know that you have definitely turned down the other offer) and then let you go. Besides, they know now that aren’t a “company guy”. I just couldn’t do it.

    If you are interested in just trying to squeeze some more cash out of your current employer, see what you can do without looking for another job for them to match, seriously. I just sat down with my boss and asked him how much money I could potentially make. He was honest about it, and I asked him what I needed to do to get there. We ended up making a list of what I needed to do, and then we set a 90-day timeframe; I am five days into it now.

    Otherwise, if money is not the only reason, then you should just go to the new company.

  6. samerwriter says:

    I’d take the job at the other company, because your current employer now knows you’re not a long-termer..

  7. Rich Slick says:

    Over the past three years we’ve had many employees at the company I work for look elsewhere, get better offers, receive matching counter offers and end up staying.

    Many employers don’t think of someone looking as a negative because often, employers don’t understand the real market rate of their employees. You can’t expect your company to keep up to date minute by minute market salaries for every position in their companies. We’re talking about the defense industry here for goodness and there must be 100,000 people employed (at least) in the industry.

    I think the whole “never accept a counter offer” is a big myth perpetrated by recruiting firms to make sure they get their commission by convincing you to move. Not sure if a recruiting firm was involved here but you can bet they’ll do their best to convince you to go.

  8. Mrs L says:

    Why would you stay with your old employer for four weeks of vacation without negotiating with the new one to match or better that? You wouldn’t take a step down in pay, so why should you be expected to step down in benefits and perks? *Everything* is negotiable.

  9. eROCK says:

    Really too many variables to make this a clear Yes/No answer. In short, I’d leave and get the 20%.

  10. D says:

    Take the 20% and run… you will probably get a six month review as well at the new company. Your current employer will keep you around, but you will have a great deal to overcome in the loyalty department, when future raises are passed out.

    Maybe I’m just vindictive, but when I have to counter another offer, I write off the employee as a longterm player. If someone comes to me with a case that they are doing something for me and think it is worth more than I am paying them, then I’m all ears. That is a much better way to handle getting a raise with a current employer.

    If it comes down to already having an offer at another company, weigh it on its own merits, (security, benifits, perks, potential for growth, etc.) if it is good, take it. Otherwise, don’t doink your current employer around for more. You will leave within a year after accepting a counter, either by your choice (job will suck) or theirs.

    Just an opinon…

  11. D says:

    Ok, plan “B”, for all of you Machiavelli fans… Jack the current employer up for the 20% counter, stay for a while, then search out the next job within 6 months or so, and take a 20% raise off your increased salary when you do finally switch. Don’t think it can’t work like that; at least in the defense industry, where I spent 12 years jumping around after receiving an engineering degree.

    Not nice, but work really is about the money. Just make sure that where you jump to does not suck so bad that you have to bail out before a couple of years and all is well.

  12. Matt says:

    NEVER EVER UNDER ANY CIRCUMSTANCES accept a counter-offer in an employment situation.

    The very moment your current employer finds out you’ve interviewed elsewhere, they’ll start looking for someone to replace you, if they haven’t been looking already. It’s only smart business practice. The 20% raise they’re offering you is the premium they’re willing to pay to keep you on long enough to fire you on their own terms, with your replacement already on the payroll…and with no other job waiting for you to go to.

    If you don’t believe me, look at it this way…either they think you’re worth the 20%-higher salary to them, or else they don’t. If they do, why wouldn’t they give you the raise before you told them you were ready to leave? If they don’t, how sustainable do you think your job is going to be at the new salary?

    If I were in that situation (new offer in hand, with a current job), I’d consider the offer on its own merits, decide to accept or reject it, and THEN, IF I decide to accept, tell my current employer that I’m quitting, and that I’m willing to either stay 2 weeks or leave immediately, at their option. I would NOT tell them how much the offer was for, and I would not entertain any discussion of continuing long-term employment at the same company, at any salary whatsoever. Tradition gives them a legitimate claim to two more weeks, but giving them any longer than that just means you’re putting all the cards in their hands.

  13. Rudy says:

    What about if I get a 32% raise at another company?

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