Because companies have imperfect reading on worker productivity, and are also trying to balance other priorities when determining pay, high output workers are consistently underpaid, called Wage Compression (https://en.m.wikipedia.org/wiki/Wage_compression)
After getting a 2% raise in the last cycle, and knowing that my granted options were going to be worthless (a factor which is under-discussed in popular news articles), I decided that it was a particularly opportune time to jump. Like many, I was not particularly unhappy, so I had not been motivated to go through the effort for search process before.
When I got an offer, my employer quickly matched it (suggesting that I really was worth that much to them) but burning a bridge with the contact you got me the new job was not worth simply reaching parity in my current one, so they lost me. If they had preemptively gotten a few percentage points closer before I sunk effort into interviewing, I probably would not have started looking.
Accepting a match is bad, it rewards underpaying. Also, the employer might have just offered you the match to buy themselves time to look for someone cheaper.
> Also, the employer might have just offered you the match to buy themselves time to look for someone cheaper.
This is "common knowledge" but I've never seen it in real life before.
I've accepted counter offers, as has my wife and quite a few former colleagues. And none of these people were ever let go from that position.
The logic doesn't even makes sense. In large companies, the hiring manager doesn't care about salaries beyond if it fits in the budget. And firing people is a huge pain in the ass. If the company wanted to replace a person with someone cheaper, letting them go would be the best strategy. That would give the company two weeks to get documentation of the job function in place and start interviewing.
I can see this kind of vindictive behavior a very small company, where decisions are made on the whims of a mercurial owner. But you're equally as likely to get fired from a place like this for any number of mundane offenses which the owner finds insulting.
I propagate it for game theory reasons. If people can be counteroffered easily there is no incentive for employers to give raises of their own accord, they can just wait until you have another offer in hand.
I was told by a manager that HR has a difficult time figuring out salary levels for tech skills. And that an in-hand offer is very effective at convincing them, and upper management to approve a larger than normal pay increase. Worst case, they might just tell me to take it.
I suspect some of "stay is bad" also comes from the employer end... even if you match an offer, is that employee likely to keep looking? They were unhappy enough to start looking - was compensation the only thing that bothered them? Probably not. May as well let them leave on their own, on good terms, and get a replacement ASAP.
If that were the case, would they stay for the money when they already have the open door and the money at the new place? Most of the best employee's I've worked with interview regularly. If I managed such employees, I wouldn't consider it abnormal for them to do so.
I expect my employees to look and interview. But, at some point, if somebody keeps coming back for counters, maybe it's time to let them go peacefully? Not sure, never had somebody do that to me, but have seen it on other teams.
I think the idea is less that they will fire you at the first opportunity, and more that if firings need to happen, you'll be on the top of the firing list.
It just happened to me, slightly different situation than a "counter offer" but it was clear upon being let go that I was retained with a short term mindset, despite what I was pitched before deciding on whether or not to sign.
"Mercurial" owners (let's just say psychopathic, it's not really a secret anymore is it?) will respect you for ruthlessly calling their BS, and then will want to make it a life's mission to teach you to heal. So they will not fire you, just make your life hell in a very subtle but undeniable way.
They'll fire you on the spot when finally you heal though.
My employer counteroffered 15% higher or so. I was kinda unhappy there, but they also promised that I would be in a position to change things, and that has so far (2 years later) been true.
I don’t know, I don’t necessarily think my employer is perfect, but they’re certainly good to me.
This also gives the current employer the benefit of doing nothing preemptively. It puts the onus on the employee to go through all this extra effort just to get the match. I'm sure plenty of employees take it too but shouldn't.
While true, changing jobs has a cost for the employee too. Its a cost benefit analysis. I often find being in a new job provides opportunity to quickly level up by using learnings from prior jobs. But sometimes the new job is just different enough that you're investing more time in learning the ropes and making connections than getting ahead, and it can be a while before you can start to have an impact. If you're already capable and empowered at the current place (or better yet, promoted by the counter offer), it can be mutually beneficial to stay beyond monetary reasons.
Not only job security. I live just a few miles from the campus of the company I work for. I could walk to work if I really needed to. The benefits are fantastic. It is a fortune 100 company that will be around for the long term. It has amazing work life balance. I like all of my coworkers and have never had a bad, or even mediocre boss. Etc.
I tend to agree that too much accepting matches incentivizes companies to get lazy about making sure they are paying market value. However, I don't think most employees are thinking about changing the culture—they're just being mercenary and trying to get the best job they can.
When I left my last job the owner asked about a counter offer. My new wage was so much higher that I told him even if he offered me that much I would resent him for valuing me that highly and intentionally underpaying me.
Couldn’t you, as a strategy, just dress real nice once every six months and then every twelve or so, you just go to your boss and say you received an offer at 10% increased salary or something? They “match” that and you both feel like you made a good deal.
It is not fraud, it is just lying. Lying is not illegal.
Withholding the truth is also lying, by omission. In that sense, your employer is already lying to you by not compensating you according to your actual value. I realize it’s a bit of a stretch but there’s something there.
You’re right, and I didn’t know that. Fascinating law. I blame being ESL.
However, I wonder if it actually is fraud. Intent matters. The intention isn’t to defraud the employer, but rather to short-circuit the whole process of job skipping for a correct wage. So it’s actually not an unfair gain, and that is precisely why I think it’s not even immoral in this case.
Is it more immoral than withholding fair wages because your employees are unwilling to change jobs? It is fighting fire with fire to be sure, but it somehow seems justified in this context.
A person in my life changed jobs to a worse location and then changed back. Pay rise of like 20% and a better position (senior doctor). That is just not justifiable. Same employer, same hospital, same ward.
I would argue that yes, it is more immoral. The employee that you are paying is being paid under a willing buyer/willing seller standard.
It's fair to argue whether it is moral to pay people less than what you think they are worth to you. That is questioning the morality of capitalism.
In contrast, "fighting fire with fire" is justifying lying. Maybe the ends justify the means in specific cases, but I believe that generally people and particularly ethicists agree that lying for personal gain is generally considered immoral/unethical. Of course, there are cases where lying is considered justified and the moral thing to do e.g. saying no if a Nazi asks you if you're hiding Jews in your attic. But in that case, you're lying not so much for personal gain but to help others.
While from a purely theoretical point of view your perspective is admirable, once you enter the real world you realize that they, we, all want to sometimes hear certain words to justify certain actions, either in their own eyes or those of the company they work for.
For example, your manager would like to give you a raise, but company policy or unwritten "this is how it works" rules say that a raise of more than 15% can only be given when the employee has received an offer from another company. But they don't actually want to see the offer, they just want you to say it, just as your partner wants you to say "I love you" to him or her from time to time to continue receiving the benefits you have been looking forward to maintaining or increasing.
this is well understood from an traditional economics perspective. accepting salary matches is a strategy that rewards employers who underpay you. not accepting matches punishes employers who underpay you. If you want to have your employer have the right incentives, you should not reward them for underpaying you
I have a very cynical view about this sort of behavior. I feel that managers do this to make the employee lose the offer at hand and then are put on the "first to be fired" list.
Once a decision has been made to move and you inform your employer that you are leaving, it is best to leave. Even if the counter offer is higher than the new offer. It just shows how dis-honest your manager is.
It is a common view that the manager is inherently dishonest and the IC is inherently hardworking, capable and honest, which aligns with the historically common concept of "people = good" and "elite = bad."
I have been both an IC and a manager, and when I was an IC I saw managers as vampires who fed on the blood of ICs. When I was a manager, I saw ICs as a bunch of whiny, entitled cogs. I am exaggerating for illustrative purposes.
Perhaps the manager had not been informed before of the IC's financial demands; perhaps the manager could not offer a raise before the employee had received an outside offer because of company policies; perhaps the manager did not see the IC as particularly capable, but this offer from a solid company made them think they had made a mistake; or perhaps they thought it was a bluff, and now they are paying for the all-in.
It is good to be cynical and to have one's own self-interest in mind. But the caricature that sees management as incompetent, corrupt or vindictive is all too easy to present to an audience that is well receptive to these appeals. I have met many like those, sure, but I have also met many ICs for whom I could use the same adjectives.
Thanks for sharing your experience from the other side! I agree and would add that my manager gave me the impression that I was really talking to two entities: The manager (who really doesn’t want to do a candidate search) and Corporate.
People too often blame the former for constraints from the latter.
Because companies have imperfect reading on worker productivity, and are also trying to balance other priorities when determining pay, high output workers are consistently underpaid, called Wage Compression (https://en.m.wikipedia.org/wiki/Wage_compression)
After getting a 2% raise in the last cycle, and knowing that my granted options were going to be worthless (a factor which is under-discussed in popular news articles), I decided that it was a particularly opportune time to jump. Like many, I was not particularly unhappy, so I had not been motivated to go through the effort for search process before.
When I got an offer, my employer quickly matched it (suggesting that I really was worth that much to them) but burning a bridge with the contact you got me the new job was not worth simply reaching parity in my current one, so they lost me. If they had preemptively gotten a few percentage points closer before I sunk effort into interviewing, I probably would not have started looking.