Half of U.S. Workers Would Use a Job Offer to Get a Raise. Should You?
According to a February study conducted by The Harris Poll for Bloomberg News, 55% of working Americans are likely to seek out a job offer from another company to get a raise at their current workplace. In the candidate’s market we’re in right now, the power of salary negotiation is in the employee’s hands. But does that mean that this is a smart tactic? It’s not as simple as you might think.
We weigh the pros and cons of using a job offer to get a raise with Lori Cole, iHire Career Advisor, and Lisa Shuster, Chief People Officer at iHire.
The obvious pro, and it’s a big one, is that you could get the raise. Another pro is that an outside job offer makes the request for a raise more urgent and legitimate. Those two factors may seem like the end of the discussion, but Cole cautioned that you can’t go into a salary negotiation armed with only the other job offer if you want it to go your way.
“Just asking for a raise with another offer in hand isn’t going to cut it,” Cole said. “You have to back up the ask with data, and lot’s of it.”
She recommended that you look for the following data when considering how to leverage a job offer for a raise:
- The market rate for your current position. Generally, the job offer is a good indication for this number, but iHire’s salary tool can also help you determine a range.
- Your own salary history. This shows if you have or haven’t received a raise in the past.
- The reasons you deserve a raise. What have you done for the company that merits a salary bump?
The final pro is psychological: It gives you confidence. Salary negotiations are nerve-wracking, especially if you’ve never asked for a raise in the past, or you’ve only gotten cost of living adjustments. Having proof that you deserve more is a big confidence booster and can help you in your negotiations.
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While those positives sound great, there are definite downsides to this tactic, too. Shuster warned that you need to be careful, especially if you enjoy where you work.
“If this is simply a strategy to get more money from a current employer, it could backfire and the employer may accept the resignation,” Shuster said. “Perhaps they have a policy that they don’t extend counteroffers. This may be for any number of reasons – diminished trust, damage to the company culture, or it could set a bad precedent. So, if employing this strategy, you need to be prepared to walk out the door of a company with a great culture that you love.”
Instead of looking for other offers, Shuster suggested you first talk with your company. It may actually work in your favor:
“If an employee has concerns about their salary, they should discuss it directly with their supervisor or HR. The forthrightness will be appreciated, and given that the market is so tight, employers are more amenable to salary increases than they’ve ever been before.”
If salary is the only issue you have at your current position, this may be your best bet. However, if other factors are at play, it could make more sense to simply accept the other job.
Should You Use a Job Offer to Get a Raise?
Ultimately the choice is up to you. To help with your decision, these are the pros and cons of using a job offer to get a raise:
- You could earn more money
- An offer makes the request more legitimate (but it’s not all you need)
- The offer gives you a confidence boost
- May degrade trust at your current job
- Could hurt the company culture
- Your employer may simply accept the resignation
- You need to be prepared to walk away from a company you may enjoy
For more salary negotiation assistance, check out our Job Seeker Resource Center.
March 14, 2022
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