Using an Outside Offer to Negotiate a Raise

At some point in your career, you could find yourself the recipient of an unsolicited job offer at a time when you’re generally pleased with your current situation. Not only can this be a great boost for your confidence, it’s also only human to consider using it as leverage at your company.

How to Leverage an Outside Offer for a Raise

Using a job offer from outside the firm to parlay a raise from your employer sounds like a solid negotiation tactic at first glance. But it is tricky terrain to navigate and a misstep could find your employer agreeing that the new opportunity is too good to turn down. When you’re mostly happy where you are, that’s probably not the outcome you envisioned.

It’s not impossible to turn the situation to your advantage, if you plan the request carefully. That starts before you get the job offer.

Prepare, Prepare, Prepare

Well before you initiate the discussion with your employer, find out how negotiations for raises are usually handled in the company and whether similar requests have been successful. It’s not enough to know that it has worked before, you should also investigate why it worked, and whether your own skills and situation are comparable.

Consult a supportive mentor outside of your organization for advice about how to proceed, or even if you should. They may be able to help you articulate your long-term career goals and provide insight into how the employer might receive the request.

This shouldn’t be the first time you ask for a raise. If it comes as a shock to your employer, they may take it as a sign that you’re dissatisfied and that you are actively entertaining or even soliciting outside job offers, and it could be hard to recover goodwill between you in the future. Talking to other firms, especially competitors, can be viewed as disloyal, and that has a dampening effect on trust. Broaching the subject of a raise beforehand, even when the attempt is unsuccessful, helps prepare the employer for a new conversation that involves a job offer.

Know the Stakes

You might be contented with your current position and had no intention of leaving the company. But if you raise another job offer with your employer, you need to be prepared to take it, or have another back-up plan. Some management consultants advise employers not to agree to a raise in these circumstances, warning that it could have repercussions throughout the organization, if other employees see that the strategy works.

Many professionals are adamantly opposed to using an outside job offer to try to leverage a raise, seeing it as a high-risk strategy that could potentially jeopardize your future at the company and your reputation outside it.

Even who those have successfully used the tactic advise that you can only do it once for an employer. Jena Abernathy, author of “The Inequality Equalizer”, who supports the tactic and used it successfully for two situations, reports that in both cases, she left each company after a year. She could never regain the comfort level, she says, sensing that neither company fully trusted her afterward.

Strike a Collaborative Tone

Negotiating a raise, especially when you are revealing that you have an outside job offer, isn’t the time or place for an aggressive attitude. Ultimatums and deadlines will alienate the employer and could trigger a hard “no”, or worse. You could come across as having decided to leave, rather than enter a negotiation in good faith.

One of the riskiest aspects of using a job offer as a tool in negotiations is the perception that the employee puts their own interests first. In a work culture that expects loyalty to the group, that can affect the willingness of the employer, and colleagues, to work together going forward, exacting a “social cost” to your work relationships.  Studies show that women are especially exposed to the risk of a social cost when they initiate negotiations, as research that shows they are viewed more critically than men when they ask for a raise.

Both women and men can avoid being branded as self-interested by assuring the employer that they are still on the same team and understand organizational roles. It’s important to be transparent about the job offer, but make it clear that you want to stay, if that’s the case, and that you weren’t actively seeking out employment elsewhere.

If you have thoroughly researched how outside firms compensate workers, you can bring the information forward with the attitude that it will help the employer make sound decisions. Ensuring that your salary meets the industry standard, for example, is good business.

Money Isn’t Everything

Is it really a salary increase that you want to pursue? You might be on firmer ground, and more likely to get what you want, asking your employer for intangible benefits that add value to your work life. The employer might be more amenable to requests such as a title promotion, better assignments, more responsibility, more paid vacation time, training opportunities, or clarity about your future progress in the company.

You should know before the meeting if those are the requests you want to make, rather than part of a strategy you would resort to if the raise is turned down.

Exit Gracefully

Despite your original intentions to stay, you may find yourself in the position of leaving the company. Hopefully, you are leaving out of choice for a better position and not because of a failed negotiation that was perceived as an over-reach.

If you handled your request for a raise with integrity, it is possible to part on good terms, leaving the door open for a return to the company in the future. Even if that isn’t possible, you can exit the company in a way that preserves your reputation in your industry and maintains valued relationships in your former position.

Offer to prepare a transition plan for the person taking your place and keep in touch with your colleagues. Gestures such as these send a message that you are still trustworthy, and still invested in the success of the company that helped you move forward in your career.

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Talk through your negotiation strategy with an experienced professional, meet with a mentor!

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