When considering new job offers, existing employees may want to give their current employer a chance to make counter offers. If your employer want to keep you as an employee and you still want to keep working with the employer, using the salary negotiation you will have a chance to improve your compensation.
There are advantages of a counter offer. Because hiring a new employee can be quite expensive, you may have a strong position in any renegotiation of your compensation package.
For most employers, it is cheaper to keep you on than find a replacement. You need no training, and there is no learning curve as a new hire takes over your projects. There is an entire list of reasons that it benefits a company to keep the personnel it already has. If you give your current employer a chance to provide you with a counter offer, you can negotiate to get a very good deal.
There are downsides to accepting counter offers, however. If you have been looking for a new job, there is often a reason that you aren’t happy with your current position. More money may not be enough to deal with those issues. Furthermore, many counter offers are based on any raise or promotion the company already had planned for you. You might just be getting your yearly raise a little early — with no added bump later on.
Even if you accept a counter offer, you have no guarantee that your employer will not fire you a few months down the road. In fact, according to statistics from the National Business Employment Weekly, four out of five people who accept counter offers and stay with their current employer will leave within a year. Some are fired, because employers assume that they are disloyal and will continue looking for new opportunities, but many will quit, because the underlying issues that originally drove them to look for new jobs were not addressed by increased compensation.
When considering a new job offer, be sure that you are comfortable taking this new job before you inform your current employer. Instead of offering counter offers many employers will consider that as an informal resignation. The mere fact that you have been looking for a different job can be enough to get you fired from your current one.