Do you match a competing offer for an employee

[Glengoyne]

I have an employee who is currently up for review. My plan was to give him a bump of about 15% to a new position. Today, he drops an offer letter off from a client of ours with a salary number that represents about a 35% bump. In the the past, I wish him well and thank him for all he has done.

At this time though, I'm seriously behind the curve personel wise. I've got to hire a good number of employees, as the business has grown several times over, and upper management has finally seen that we simply have to do it. My sense is that my department is about to be buried in a massive avalanche of work. I see the projects piling up on the mountain tops, and we just can't keep up.

As a result I'm thinking of matching the offer. This would be a bit of a problem as it would leap frog this guy over two others in the department. One of them, I've already arranged to get a significant raise. Only now I don't want him to think he only got a promotion because this other fellow held me up with a job offer.

I've never matched an offer in this circumstance, in fact I consider it a rule of sorts. I think it sets a bad precedent, and might lead to other issues. Although I'm typing this after getting home from the office at sometime after 8 PM, so I really don't want to deal with the extra weight of shifting his workload to another person.

In any case, I'm posting here about an actual situation I'm dealing with, and that has me concerned as to who I'm utilizing as a sounding board.

[Grammaticus]

I would not do it just because you are short staffed. If the employee is not a strong performer, it will not be good in the long run. Although, If the employee is outstanding and your top performer than great, get him/her where they need to be salary wise.

It is hard to really answer without knowing how your company handles salary. Some places make giving good merit raises almost impossible, while others allow whatever the manager wants to do within budget.

[Deattribution]

Is there a chance he could just be playing hard-ball with you and not legitimently have an offer from another company at that wage?

If you decide not to match, it might be worth while upping that bump to say 20-25% if you really want to keep him and might lose him anyway.

[JeffR]

If you decide not to match, it might be worth while upping that bump to say 20-25% if you really want to keep him and might lose him anyway.

Yeah, that's not a bad idea. If he's got a little bit of loyalty towards you, maybe he'll take it. With the company growing that fast, he should be able to see bigger paydays down the road.

If he won't take a raise that doesn't match his offer, I doubt you'd want to keep him around, anyhow. He'll be back with another offer sheet to show you sooner or later.

If he goes, you're going to have to train a bunch of new people anyhow, one more won't make that much of a difference. Might make for more late nights, but a month of working until 8 is worth it if you set yourself up to always be out by 6 after that.

And why's a client stealing your employee? Doesn't sound like a client worth keeping if your growth is already good.

[stevew]

Bill Belichick wouldn't match the offer. Unless this guy is your Seymour, you gotta let him go.

[Arctus]

I have an employee who is currently up for review. My plan was to give him a bump of about 15% to a new position. Today, he drops an offer letter off from a client of ours with a salary number that represents about a 35% bump. In the the past, I wish him well and thank him for all he has done.

As a result I'm thinking of matching the offer. This would be a bit of a problem as it would leap frog this guy over two others in the department. One of them, I've already arranged to get a significant raise. Only now I don't want him to think he only got a promotion because this other fellow held me up with a job offer.

I've never matched an offer in this circumstance, in fact I consider it a rule of sorts. I think it sets a bad precedent, and might lead to other issues.

Have you had a discussion with this individual yet? He may not be willing to consider a counter offer. Do you understand why he is leaving? Is this strictly a salary issue? If so, has he signaled his concerns in the past? If not, has he shared other concerns with you in the past?

Sorry for answering your question with a ton of questions. Understanding the employee's motivation for his actions is probably the most important piece of the puzzle.

If at the end of the day the employee is worth the 35% bump (and you can afford to give it to him), and is willing to stay onboard for it you should probably counter.

I have made matching offers in the past when I could afford to do so. I don't see any problems with it. I get more uptight about providing someone an offer letter if I suspect that they are using it just to get a matching offer from their present employer.

[Arctus]

Is there a chance he could just be playing hard-ball with you and not legitimently have an offer from another company at that wage?

Generally there's not a real good way to investigate whether an offer is legit. Its not like he can call his client and ask "Did you just offer my guy $X to work for you?"

If you somehow determine that you have an employee that is dumb enough to try a stunt like this, just ask him to provide a letter of resignation by the end of the day.

[gstelmack]

Of course, my opinion as an employee would be "if you can afford that much of a raise, why weren't you paying me that all along?".

But if he dropped off the offer letter rather than a resignation, it's clear he's trying to get more money out of you. You have to decide how much he's worth, then pay him that. And if you're worried about the reaction of the other employees, decide how much they are worth, and pay them that. If they leave, well, you did your best, and they wanted more than they were worth.

Of course, I'm also one who has left jobs for lower-paying ones because money is not the end-all be-all of employee satisfaction for me, so take my opinions with a big grain of salt.

[dubb93]

I think it all comes down to his worth and how in need he is. Some jobs someone could ask for more money, you say no, and leave and find a job of equal or greater value in the same area within the same day. How in demand are this guys skills and how in need of him are you. If he is in demand and you need him I'd pay him what he wants.

[Arles]

Here's how we do it. We will only match if:

1. Come in and say they are leaving/possess the offer.
2. They are in the top 20% of our group in peformance.
3. Matching them will still have them within the range we are willing to pay for the position.

If all three check out, we will match. If any one of the three don't, we say "goodbye".

[digamma]

His offer letter is from a client? Would there be any positive effects on the client relationship from having him there?

[BrianD]

Personally, I wouldn't match the offer. When people threaten to leave, they pretty much always do. You may buy some time with the matched offer, but this person is still going to leave. He will just be in a better position to bargain with the next employer. Rather than try to buy 6 more months, look for someone new to bring in and reevaluate the worth your are putting on this position to see if you are in the right range.

[stevew]

Can you figure out his VORP?

[Franklinnoble]

If you match the offer, expect to be faced with a similar situation from one or more of your other employees very soon. Word of this will get out.

If you don't match the offer, and it's legit, the dude will probably walk (because that's a substantial pay raise). Then he's going to poison the waters a bit, because you know he's going to tell his co-workers why he's leaving.

It really depends on how valuable the guy is. If he's worth leapfrogging your other two guys, then do it. If not, don't do it just to keep another pair of hands around.

It sounds like the job market is pretty rich right now, so you might have to up the ante a bit, but I think the better thing to do is hire someone totally new (at the higher salary) than set the precedent of matching offers.

[Desnudo]

Don't base long term decisions on short term need.

[Anthony]

eliminate him. set an example.

[mgadfly]

Pay him. If he wasn't loyal and didn't want to stay with you, he wouldn't have even bothered giving you the opportunity.

I'd probably go to him and tell him that you can't match the offer, but that you can do X, and that you've appreciated the job he has done for the company and clients. No need to treat him and the rest of the employees like the opposition, just tell him how it is, and let him make the call.

Under no circumstances would I let him go and then pay a new person the same rate that he requested. New people suck. They have to be trained, they are always asking questions, they take more energy than just doing all the work yourself.

[Crapshoot]

Pay him. If he wasn't loyal and didn't want to stay with you, he wouldn't have even bothered giving you the opportunity.

I'd probably go to him and tell him that you can't match the offer, but that you can do X, and that you've appreciated the job he has done for the company and clients. No need to treat him and the rest of the employees like the opposition, just tell him how it is, and let him make the call.

Under no circumstances would I let him go and then pay a new person the same rate that he requested. New people suck. They have to be trained, they are always asking questions, they take more energy than just doing all the work yourself.

Pay him, or at the least make a counter offer (at least 25%) - make it worth his while to stay if he's a worthwhile employee.

[Greyroofoo]

where's the poll with the trout option?

[Fidatelo]

Only match if he's a high performer AND well-respected by his co-workers. If the others feel he's average, or even hardworking but a douchebag, they'll resent the decision. If they honestly feel he is worth it then they'll understand and everything will go smoothly.

So, if the guy is Tom Brady you do it. If he's Kerry Collins you don't. If he's Terrell Owens you don't.

[TroyF]

I've made a move like that once in my life. (walked into the office with an offer sheet and dropped it on my unsuspecting boss)

My intentions were very simple and said a lot:

1) I want to stay HERE. If I didn't like the company, the people or the position I was in, I would have taken off and the current company wouldn't get the chance to match.

2) This is what they think I'm worth and the financial gain is to much to turn down.

In my case the company offered me a 15% raise to stay (I had an offer of 25% from the other company)

I took the 15%. I knew they couldn't match, but was happy they made an effort to keep me. So I stayed where I enjoyed working.

I don't think you hand in an offer sheet and give people a chance to match without wanting to stay.

[Raven Hawk]

The simple answer to the question is:

Yes - if he is worth 35% more.
No - if he is not worth 35% more.

The more complex answer is:

Yes - if the position is worth 35% more.
No - if the position is not worth 35% more.

What you really need to do is evaluate your situation. Would you be able to replace his position for his currently salary plus the originial 15% you were going to give him? Is he a hard worker that is a real asset to the company? Does he have unique skills that can't be duplicated?

It is not a good precedent to set to do this. I remember one time we had a guy do this. He gave two weeks notice and we matched the offer to keep him on because he was one of our best guys. A month later another guy accepted an offer at the same place the first guy was supposed to go to. He kept coming into the HR office wondering if we were going to match the offer. He really wasn't happy when we said "no." The truth is that the second guy was a marginal contributor, so we let him walk.

Also consider if your employee is being offered a comparable position. If he's being offered a higher level position, you probably shouldn't match it. If you're paying below market value, you should consider matching his salary and bumping the others' salaries to a competitive market price. As long as you communicate why you're bumping their salaries, you shouldn't have problems with it. You can tell the one guy that he's getting a 15% merit raise and a 20% market adjustment raise.

Personally, what I would do is not match the raise, but I'd counter with an offer of 25% to 30% to see what he really wants to do. If you counter with a 30% raise and he still leaves, he pretty much wants to leave. If he stays, then you know that he's a pretty loyal employee that just wanted to get "his fair share." If you're not paying market value for your employees, you'll continue to have this problem. As a rule of thumb, people don't leave companies because of salary, unless there's a huge return. People leave companies because they don't like their boss. Since this guy showed you the letter, I'd guess that he likes working for you, but he's trying to tell you that you really aren't paying him in the ballpark of what he's worth.

[Glengoyne]

Thanks guys for all of the input. Especially the couple of you that PMd me. It is sometimes worthwhile to get the input of others on a situation. What I've appreciated most is that the responses have been all over the place. Had I offered a poll, I'm not sure there would be much of a prevailing opinion.

It just comes down to a difficult decision and a balancing act of sorts. How do I measure or how much do I value this employee's experience? That is what I'm losing if/when he leaves.

So how I answer that question will determine the outcome.

[RPI-Fan]

Isn't "dropping off" an offer sheet kind of weird?

To me the right way for the employee to handle it is to sit down with and discuss the situation. Don't just leave a letter on someone's desk.

[Eaglesfan27]

I'll just echo what others said here. I could have given the offer sheet that I was offered to my current (now ex place of employment.) I didn't do that because I didn't want to be here any longer (for good reasons.) I think the fact that he gave you the offer sheet indicates he wants to stay, and is hoping you will show him that he is wanted. If the employee is worth it, I would offer something in the range of a 25% raise, maybe 30% if he is very valuable.