Ask HN: How common is a counteroffer for developers who give notice?
Seems like it was common practice a couple of decades ago. Does anyone try to retain developer talent these days?
There's a line of thought which assumes that an employee that's given notice has already mentally "checked out". Therefore, it's unwise to present counteroffers. Even if the manager persuades the employee to accept the counteroffer, it's inadvertently detrimental to the team because you have retained a disengaged mind that was eager to leave. To avoid all that, you wish them well with a smile and just let them leave.
Many companies follow that principle. It's important for a developer to know ahead of time if the company doesn't do counteroffers because if you're just fishing around for job offers with no intention of changing jobs, the company may call your bluff and let you leave.
That's just bullshit rationalization why they don't want to raise pay. Profits come first for most modern companies, and the rationale for action trickles down from that basic driving force.
Best engineers are coin operated and problem focused. If they get an offer, say, 20% better than their current package with the roughly same job otherwise, they would be blind fools not to leave. Talking in the general Big Co. environment, that is. In smaller companies with stronger ties other dynamics might kick in.
And, there is the situation of the gimme-more-money-or-I'm-gone bluff, of course.
I don't think there is any rational reason not to give a counteroffer to a solid contributor - if the offer is real and he's worth it. Political reasons might of course kick in, like a corporate policy, that have nothing to do with the individual contributors motivation or output.
If the employee already starts looking for another job without even trying to get more money in his current position, there is no reason to try and convince him to stay.
No. The calculus is different. If it's a raise, it merely increases the cost of an employee. A counteroffer on the other hand counters several costs and risks. Hiring, training, loss of knowledge etc.
"If the employee already starts looking for another job without even trying to get more money in his current position"
Why do you presume that is the general case? I.e. does not ask for money or that they sought for another job.
Best talent tries to get compensation their worth. They probably ask for raises - but they are probably also sought by recruitment consultants. If a raise is not coming, and a consultant asks for what they would be willing to work for - well, it's simply not a case of trying to leave.
Most of the time I will get a standard small raise, if I take the same list out to the market and get an offer suddenly I qualify for higher raises. Overall businesses are not pro-active at all about retaining talent until push comes to shove.
Whatever your thoughts on the suitability of a workplace like this, know that the most time/effort efficient way to get a raise can legitimately be to show up with an offer which demonstrates a higher market value than current salary to justify an emergency retention pay adjustment
OBVIOUSLY we're all talking about different corporate cultures and you have to play whatever strategy is best for your environment.
Engineering in the large is a profit generating endeavour. Therefore, when an engineer reviews his revenue stream, what he is doing is evaluating the worth of his contribution to society based on one heuristic variable.
Sure, it's never clear cut, but putting it as bluntly as I did underlines the fact that pecuniary compensation can be viewed as a form of just reward and not just profit seeking (which some consider immoral).
Example: An employee has become bored in their current role, and a snoozing manager hasn't noticed in a while. If the employee hasn't been engaged by their manager then, sure, they'll look elsewhere. HR's (and the manager's manager) first question should be: have we offered this employee a different role outside of this project/team.
Not every employee who has given notice is completely "checked out". They may be frustrated in their current role where they might not have been given the right opportunities for more responsibility or higher profile projects. Asking the employee what their real issues are is the first step.
Other than the vague "Are years four through six here going to make me more valuable than years one through three somewhere else?", I would have been fine sticking around with a promotion, new technical opportunities, more strategic leeway, or even a big enough raise.
Anything else means having failed the employee - with some exceptions. Some folks do have unreasonable requirements that will not be satisfied.
Usually it's because the organization didn't allow them the room to manage the way they wanted. Sometimes they just weren't allowed to provide the raise or promotion necessary. Sometimes there weren't roles for tackling the problems I wanted to tackle. More often, the managers were just too distracted and spread thin in time and/or political capital. They were pressured (or at least felt pressured) to say yes to things they shouldn't (over my concerns and objections) and didn't have time to do much more than keep chopping wood.
I'm not a shy person. I'll be clear and hopefully even handed about my concerns. But I won't throw tantrums, talk about people behind their backs, or make ultimatums. If, after a reasonable amount of time, my input isn't taken seriously, I'll have to find opportunities where I can contribute. Maybe on another team, maybe in another company. Otherwise I'm shortchanging my potential.
> Some folks do have unreasonable requirements that will not be satisfied.
I don't have unreasonable requirements, but good managers will be clear if they feel this way. It will save me time in the long run, at least.
I started employees at higher rates than senior traffic engineers make today. Pay also included bonuses and profit sharing, sort of. The profit sharing wasn't ever written into policy.
The benefits were prett good. I always tried to find a way to ensure any additional training/education goals were met. We'd still pay their partial salary while they attended, cover child care expenses, and things like that - if and where needed. It wasn't always domain related. I've paid for people to take culinary arts classes, albeit at night, just because they wanted to learn to cook better.
Err... It is slightly more involved than that and a post of its own, if you want me to write about that aspect. I'm willing to do so, but I strive to remain on topic.
As mentioned elsewhere, I had slightly less than 250 employees. I also never took any classes in management. So, I got away with things that would be laughed at today. Our head office had a small bar and pool table in the back, for example.
Anyhow, a programmer would have probably started at about $120k in the year 2000. That is unadjusted. Not having taken any management classes, I realized that individual salaries were paltry compared to other fees, I paid $12k per month just for a print room.
I also realized it wasn't my money paying for it. I kept the business' funds separate from my own and drew down a salary like everyone else. My clients paid our salaries. If I had higher salaries, my rates would adjust to suit.
If you're curious, I actually paid myself a smaller salary than some employees got paid. I'd hired them to do complicated things that I could not do. I paid them accordingly.
It was rather unorthodox. The company was sold and the sake was finalized in 2007. The now-parent company is public so it has SEC filings. I suspect I've given out enough information to figure out the name, but I'll let you sleuth or not. I kind of enjoy not being known as 'that guy' and having to meet expectations.
Related: I am still mulling over the idea of writing a book, but I am not really a good writer. So, it's a bit of a toss-up.
I think part of my job as a manager is to make sure that everybody is paid fairly all the time. For me that means benchmarking the salary structure to peer companies, a good career ladder, regular performance reviews, etc.
If one of my employees came to me and said, "A friend at company X said I could make $Y if I moved there", I'd definitely use that data to make sure our total package was fair. Hopefully we'd find we were already doing things well, but if not, I could easily see that research resulting in raises.
On the other hand, if somebody comes to me and says, "I already have an offer in hand from place X for $Y because I've been secretly job hunting for the last month," then I'd be very unlikely to counteroffer with more money. I'd certainly want to talk about why they were unhappy enough to start job hunting. Maybe there's a problem we weren't aware of or taking seriously enough. (And also I'd want to investigate how we hadn't discovered the problem until it was big enough they wanted to quit.) If we can solve that problem for them (and hopefully for other people, we should.
But if it's only a question of money when I think our pay is fair, then I wouldn't counter. One, I don't think money keeps anybody anywhere for long, so I'd expect the counter to be a bandaid. Two, either I have to change the whole salary structure to match or I've just made things less fair. That penalizes people who aren't as money-focused. Three, there are often reasons other places pay more on a cash basis. If somebody values cash more than other things I like to provide (e.g., working with good people, good work-life balance, more time available for learning, not having to clean up giant messes), then maybe they will be happier elsewhere.
And really, I'm fine with that. If somebody working for me would really be happier elsewhere, I'd rather help them find that next job. And if they won't be happier elsewhere but need to find that out for themselves, I'd rather have them feel welcome to come back.
I like managers that set up their team for big wins and them make sure they are treated accordingly, both humane work/life balance and with excellent pay. "Fair" pay is fine, but I'm striving to provide an exceptional value. So I think fair pay if I achieve that goal doesn't look like "competitive" or "market rate".
If you strive to 'provide exceptional value', but want to be compensated highly, then the you are not providing exceptional value. Perhaps it should be 'commensurate value'
On the flip side, I was hired during a hiring freeze.
First of all, it is simply not a game that I am willing to play.
Secondly, the other team members will know about it (eventually) and will (eventually) try to do the same thing.
Overall, it would be detrimental to team cohesion and would undermine the culture that I want to build:- One that is focused entirely on solving the problem in front of us.
If a member of my team needed a pay rise (i.e. if they were expecting a child) then I would work energetically to represent them within the organisation to make sure that they get what they need -- but for their part I would expect them to interact with me honestly and not play silly games.
Wow, isn't that massively discriminatory? Raises and contributions should be merit- or contribution-based, no more and no less.
Another point is some might feel if they have to ask for a raise, the company has failed them already, they work should have been noticed by then.
Talking someone into staying might just get them to say yes, to be nice, then just change their mind and not show up some day.
If the reason is something that money could solve, then I always encourage the company to offer more.
An example of this might be "I wasn't looking, still don't feel like I am. But company X asked me to look at a role, and I felt I shouldn't just ignore and it turns out they're offering $ and whilst I don't really want that role I would be a fool to decline it out of hand as that difference helps achieve <insert life goal>.".
In that case... if the company can do it, do it.
But if it's more "I went looking for something else and I hate this job, and this other stuff winds me up, but if you gave me all this extra money I'd suffer it a while longer"... then the company should wish you well and if they understand fully how toxic you now are to the team would let you leave that same day.
It depends. It always depends.
It is important to note that I was doing really important work at the company. I was probably not considered a "normal" employee.
The second situation is they're hemorrhaging staff, and will counter everyone, or proactively give raises to stem the tide.
I once took a counter offer that was nearly 50% of my salary. That was too much money to turn down.
That's probably how it happened to me. I gave my notice, and people looked worried and had hushed conversations. A couple of hours later, managers from other teams were offering me better roles, but I turned them down, because the reason I was leaving was that I didn't like the way the company had treated me up to that point.
The problem with companies that act like that is that if they believed I deserved a better position, the time to act was when I had made it known I was unhappy, not when I'd already made the decision to leave. I'd already applied for internal promotion a couple of months before, and they could have acted then instead of just never getting back to me.
Nevertheless, it is all the same. If I need to threaten company with leaving (whether with job on hand or in 1:1) in order to be treated better, then I am better off elsewhere.
Many companies treat complains as just whining - they see the goal as letting you talk and have some reassuring speech, not to take action.
He got it, if you're curious.
As strange as it may sound, he was worth all his quirks and more. As for quirks, he had plenty. I've never met a better DBA, however. We were working with full TB data sets by 2000. He enabled that, for the most part.
Walmart was in an article touting themselves as the first to deal with a database a TB in size, he found that greatly amusing. I have trouble wrapping my head around databases, I think he just knew them by intuition.
His choice of office space was one of his more mild quirks. I believe he is still retired but I can safely say he enabled us to do things we'd not have been able to do without him.
Edit: I could probably write whole books about the people who worked with me. Getting started in the early 90s seems to have made quite a difference in the people aspect. I never had an HR department and I'm not sure I could have forced one into the mix.
I'd been the original programmer, except I can't code very well. I eventually hired professionals. They, of course, told me how much my code sucked. They were rather blunt about it and I took the hint and got out of their way.
Eventually, the code to enter the server room was changed at the main office. I could have forced them to give me the code but that seemed unwise. I hired people to do things I could not. If I could do it, I wouldn't have hired them. So, I learned to put my ego aside and get out of their way.
This is long enough, but that's the gist of it.
I liked the people I worked with, I liked the work culture, and even liked what the company was building, but at the end of the day it was worth it for me to switch to working on "non-sexy" legacy tech at a large corporation and all the BS that comes with that for financial gain, stability, and benefits.
Then again I lost a position in a corp when the whole project was cancelled. The redundancy pay was sweet though.
Sorry to hear that. As long as it wasn't canceled because they had trouble paying the bills or the teams were dysfunctional, that's usually pretty short-sighted of the corp.
Here's a bunch of people that we've already taken the cost of recruiting/training/onboarding who are familiar with our technology and processes. The right answer is to reassign them to other work in the organization.
I knew people who had been working for large legacy corps who made 6 figures for over a decade while having the technical chops of a high schooler after their first AP programming class, and barely speaking English.(didn't know common words like bread, or meat)
In many cases, if the business is advancing toward a downsizing, they might choose not to make a counteroffer and instead use the departure to fill a planned staffing reduction. This can pose serious issues for the manager when a business chooses such a course when their manpower was not originally slated for downsizing.
I've seen lower appetite for counteroffers in the "middle range" of maturity. When a team has begun to reject cowboy culture and tribal knowledge, embracing high levels of testing, documentation and automation there may be reduced interest in keeping someone for skill and knowledge. I've seen this behavior diminish when organizations reach a higher maturity level and are making a more sizable investment in long-term growth of their employees through things like training.
When serving as a manager, there are many cases where one might step in to ask the business not to make a counteroffer, such as: if the employee is relocating due to their spouse, if the employee determines remote work is not a good fit for themselves, or if the employee is seen to be making positive career steps forward which could not be matched in their current work environment. Many managers are big enough people not to try to hold their employees back.
There are of course many places I've not worked, and many possible cases I've not seen, but the above is my experience.
There was, a dozen or so years ago, a notion that you should never accept a counteroffer for exactly this reason. Your employer would be buying optionality on retaining you. What they want isn't you, but the right to decide when to replace you and a longer grace period to do that in.
This definitely does happen; it happened explicitly to me in a previous job (I was told a few years after I left, a year or so after accepting a counter and then being marginalized).
But I would strongly discourage you from taking it. Basically, the reason you are not at that salary/position yet, is because you are not recognized at that level by management. getting a bump via a counter offer will mean that you will be last in line for raises/bonus/promotions since you will be viewed as getting paid above your grade. This was what I observed as a manager at a big company during calibrations.
If you want a bump, ask your manager - where do you need the most help, what can i do to have a larger impact this cycle etc... - and do those things. If that is not enough, run :)
I wouldn't give a counter-offer to an employee if I know that I can't really offer a better salary or work environment, and it would be even undesirable for me to have him accept it as he would probably always have the thought of leaving haunting him afterwards.
Sometimes not receiving a counter offer is the opposite of being terrible. Yours is a terrible advice.
Two times, I accepted the counteroffer and stayed (for a while.) It didn’t have any adverse impact. I’m still at the company of the second counteroffer.
My experience is that big companies are typically quite rational about the whole thing. No hard feelings or anything, just business.
If you go to management and say "I've been struggling with X, Y and Z can you help me?" then you're signaling that you trust the company to help you, wether that's workload, salary, etc.
Management that counter offer after giving notice is 9/10 trying to keep you around long enough to find a better replacement knowing that you'll leave again in the near future, or they'll boot you when the replacement is up to speed.
No not usually. I don’t get why a group (techies) that fancies themselves so rational can’t understand simple economics. Giving notice means I have leverage with a better offer no more less. The reason for that may be hard for the current employer to fix or not. Often it is not hard for them to fix, especially in larger organizations. And often coming with a better offer in hand is the only way to signal that. We can wank about ideal managers and all that but that is not how the world works.
I haven't personally gotten any yet after 3 resignations in my professional career, but that may be because in all of them, I was leaving because I was already very sure, based on factors other than the salary, that I no longer wanted to work there.
Well, the first one, I might have been able to get a counter-offer or other change in working conditions if I had been fishing for it, but I had long been coming to the conclusion that I just didn't see myself there long-term.
There is a lot of discussion out there about getting and giving counter offers and whether or not you should accept one. One thing I would say to the companies/managers that I haven't seen much - if you have the budget and desire to keep the employee to make a counter-offer, why didn't you just give them that raise in the first place? Seems easier than letting them run around interviewing at other places and negotiating offers with other companies, just to save 10% or whatever of their salary for a year or two.
However, if you want to stay and it’s just about money or title I would suggest talking to your director of recruiting or engineering manager. In my experience, chatting with them and being honest saying like “I love the company, but I’ve gotten some verbal offers/interest from company X, Y, X and the package they’re offering + the challenges they want me to solve are very intriguing. I’m loyal, so I haven’t taken any interviews as I really want to solve challenges here but this looks like a great opportunity. What can we do to make my current role as competitive that these ones?”
You have to be willing to leave though, as they might just say nope and that’s the end of it.
I used that same tactic, along with a proposal of what I wanted to do/be paid, and got a hefty increase.
It costs a lot to find developers, then to hire good ones. It can be $5-20k + the domain knowledge you have so it’s not cheap to replace a good developer.
My experience is different. Avalanche the expensive and experienced devs with more and more work until they signalize that the team requires upsizing, make them resign. Fish for students, contractors. Hire contractors exclusively through a chain of intermediaries, so their salary and employee rights will be minuscule and they will have no leverage to say "no" to the most ridiculous bullshit.
Please tell me there exist companies which appreciate their specialists, which offer a significant payrise to make them stay. I have yet to encounter and work for one.
1) Company knows they are going to eliminate a team within XX months. I'd take a huge counter (3x salary) to stay on to help shutdown a project or sell the company. 2-3x salary in these cases are fairly normal when a company gets sold and they just need help transitioning to the new parent company.
2) Company offers a severance package along with it. E.g., we'll give you a salary bump and a 12-month severance if we let you go without cause, within one year.
However, I've been on both sides, and I've offered a counteroffer to anyone who is leaving and I wanted to keep. Any company who doesn't do that probably doesn't have good developers who are constantly getting recruited on LinkedIn.
An employee who gives me solid market data, and is a good performer who likes the current position, does me a favor if they let me know I missed the memo on current market.
In most companies, it's 2-4% pretty year into infinity, and if the overall market grows faster than that, independent research may be warranted.
Meanwhile, of someone gives notice, rather than starts a conversation, I'd be much more wary. If we don't have a good, open relationship already, a quick raise won't fix that.
And looks like they changed their company name
I also believe that developer availability is going to soon outspeed demand. Revel while we get the importance.
I don't think you should ever take counter offers if you previously asked for a raise and got no where.
I think if you don't get the counter, the reason is clear.
There’s no bluff being called. This is simply the normal way for transaction participants to act rationally and in their best interests.
Most people are not skilled negotiators. That aside, the balance in that negotiation is in favour of the employer at the start. At that point you are worth nothing to them. They can just go to the next candidate. You on the other had have a mortgage, debts to deal with, bills to pay, family to feed, etc. It takes time before that balance tips towards the employee. That's when the company needs to reassess what they're paying you.
> There’s no bluff being called.
They know you're worth more but at your yearly performance review they'll do their damnedest to only give you cost of living if even that. Then they put the burden on you to prove you're worth more than that. "What did you accomplish this past year?" They know what you did for them. They're hoping you were too busy to document it yourself. "We can give you more but you have to take on more responsibilities." They were paying you less than you were worth for your current workload before this! This extra work will mean even more unpaid overtime which will nullify the raise and even turn it into an effective pay cut. Even if you do manage to document your past work and/or agree to more work you'll just hit the arbitrary raise cap they put in place. "This is the best that we can do."
They are bluffing. They're gambling that you can't find a better offer. Or that it's too much hassle to switch. But once you call their bluff that's when you get to finally see what they really could have been paying you.
> act rationally and in their best interests
Companies very rarely do this for long term goals. Short term gains is top priority. Saving money on payroll now is better to them than mitigating the big financial loss that loosing a key employee would cause in the future.
That is the reason why we see this counter offer behaviour each and every time. You've change the "he's going to quit sometime in the future" to "he's quitting NOW". You've now made it a short term issue and that's what finally got them to react.
Umm, because it WAS necessary. Just one party didn't update their pricing until after the market moved against them. "No reason to believe" is pure nonsense; it's management's full-time job to be on top of that, and they failed.
One option you have is to prepare to ask for a raise, and then pitch them on why you're worth more before you accept the other offer. They might agree with you, and simply give you the raise you're asking for. Using this approach, you're making it about the company before you make it about yourself. If you don't get the raise, accept the other offer. If a counter offer comes your way, you can decide whether you wanna deal with it.
What I always do though is try and keep a good relationship with all departing staff so if there's a critical need for knowledge that only they have, they can be brought back on a consulting basis for specific problems. That way people can leave and organizationally you're not stuck in a bind.
He wasn't very happy when I gave notice and rejected his counter-offer.
If there's even a slimmer of chance I could accept it, yeah, I could go for it.
Edit: 2 of these were 'big companies', 2 were small (small business and a startup)
I call them counter offers and not simple raises because of the tone and demeanor of those involved. These were not just "you're doing well" conversations, they were "here's some extra compensation, please please tell us if you even think of looking elsewhere so we can plan ahead" conversations.
But the directors said only people who come to work before 11 are allowed to be managers
This increases the amount they have to pay via notice pay.
Only would work in a large corporate situation where you know your team is being laid off in a year anyways.