The Year of the Counter Offer

When I meet a recruiter, I always ask how business is. This week at a local networking event I was surprised to learn 2016 is the year of the counter offer.

This recruiter, who works for a national placement agency, told me recruits are receiving and accepting the counter offer so often (more frequently this year than ever before) her firm has named 2016, “The year of the counter offer.” Seeking new employment as a way to force an employer to give you a raise is so popular this agency is calling it a trend.

She stated despite the great recession having ended a few years ago, many companies continue to be apprehensive about the economy, are reluctant to convert temporary employees to permanent and have not given employees a decent raise in years. Millennials who accepted jobs below normal starting salaries are tired of waiting for a fair wage and are using the counter offer as a salary negotiation tool. 

Companies are well aware of how much it costs to hire and train a new employee:

According to Zane Benefits:

Some studies (such as SHMR) predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that's $20,000 to $30,000 in recruiting and training expenses.

But others predict the cost is even more - that losing a salaried employee can cost as much as 2x their annual salary, especially for a high-earner or executive level employee.

I learned this the hard-way after one of my employees left last year. I now realize it is cheaper in the long run to figure out how to keep employees rather than having to endure the time and cost of recruiting and training someone new.

If you do threaten to leave your job be aware of the potential risks:
 
You may not receive a counter offer:
You or your position may not be as valuable to your employer as you think it is. Also, some employers think everyone is replaceable and have a policy to never give a counter-offer. 

Accepting the counter offer could hurt your reputation:
Most employers have good memories; from this day forward you may be known as the employee who resigned to get a raise.

My company has this employee – he actually accepted a counter offer on two separate occasions. When he was seeking a promotion last year he came very close to not getting it because of reservations as to whether he was management material. Similar to my friend who is known as the 4:00 and she's out of here employee, he is known as the counter offer employee. As he struggles to adapt to his new management role, several managers site his counter offer history as an ignored warning sign.

You are burning bridges:
I accepted the counter-offer when I was in my 20’s. Very similar to the scenario above both a co-worker and I accepted counter-offers after finding new jobs with the same placement firm I referenced above. We had both been warned of the disadvantages of accepting the counter-offer (if we are unhappy now, we will most likely be unhappy six months from now just better paid). We both had liked our jobs, but needed and thought we deserved more money. In both cases, our employer matched our new salary as an incentive to keep us. Unfortunately, a year later we were both out of a job when our entire department was relocated to Chicago. My co-worker regretted her counter-offer decision as she struggled to find another new job. I never regretted mine because I easily found a job on my own, but the agency I had worked with never worked with me again. I am sure there was a "don't work with" note attached to my file.

You may be fired in the future:
If our entire department had not been downsized, I wonder if our jobs would not have been in jeopardy in the future. Assistants were hired for both of us shortly after our counter-offers were put in place without our permission or request. My co-worker’s assistant didn’t work out and left a few months after she was hired. I struggled to keep mine busy (would you train an unwanted assistant to do your job). He was the first person to leave when the department lay-off was announced.

My recommendation:
My company’s economist projects 2016 as a year of slow but steady growth, but 2017 to be a year of contraction. My recommendation is instead of 2016 being the year of the counter-offer make it the year your find a great new job especially if you have a few years of experience. If you wait and are underpaid, underemployed or your company still hasn’t hired you permanently you may be stuck in an undesirable work situation for several years to come.

Have you ever accepted a counter offer? Was it a good decision?

Final Thoughts on Sheryl Sandberg's Book Lean-in

This month The Savvy Reader Book Club read Sheryl Sandberg’s book Lean In: Women, Work, and the Will to Lead. Today I am sharing my final thoughts on this book. Previous discussions included What does "lean-in" mean for you?, When Taking a Pay-Cut is a Good Career Move, Sheryl Sandberg's Advice on How to Get Hired and Receiving a Job or Promotion Because You Are a Woman.

As you may recall I put-off reading this book because of the numerous negative reviews I'd read on-line; I thought it wouldn't be worth my time.  Was I wrong.  This book is the best career advice book I've read in years.  Here are a few additional career lessons from the book I didn't cover in previous posts:

Don't ever ask someone if they are your mentor:
This question is a total mood killer.  If someone has to ask the question, the answer is probably no. When someone finds the right mentor it is obvious.  (Pgs. 65-66)

Also a note from my experience, don't hand your business card to someone immediately upon meeting them with no additional conversation.  I can guarantee that business card will end up in the garbage.

On negotiation:
The goal of successful negotiation is to achieve our objective and continue to have people like us.  Professor Riley Bowles believes that women can increase their chances of achieving a desired outcome by doing two things in combination.  First, women must come across as being nice, concerned about others, and "appropriately female."

Sheryl advises many women to negotiate rather than accept the original offer. By doing so, women position themselves as connected to a group and not just out for themselves; in effect they are negotiating for all women.  Whenever possible, women should substitute "we" for "I."

According to Bowles, the second thing women must do is provide a legitimate explanation for the negotiation.  Men don't need to do this.  (Pg. 47)

What can we do to change social norms:
Too many work standards remain inflexible and unfair, often penalizing women with children.  Too many talented women try their hardest to reach the top and bump up against systemic barriers.  So many others pull back because they do not think they have a choice.  All of this brings me back to Leymah Gbowee's insistence that we need more women in power.  When leadership insists that these policies change they will.  Google put in pregnancy parking when I asked for it and it remains there long after I left.  We must raise both the ceiling and the floor. (Pg. 169)

Bottom line:
I think Sheryl Sandberg 's book Lean In: Women, Work, and the Will to Lead would make a great graduation gift in addition to being an excellent choice for any career centered book club.

 

If you read this book what did you think?

Please Note, I am an Amazon Affiliate

 

When a Salesperson Refuses to Hear the Word “NO”

I receive quite a few phone solicitations from salespeople in my job as accounting manager. Ever since I read Gavin De Becker’s book The Gift of Fear and Other Survival Signals that Protect Us From Violence, I’ve been paying more attention to how these salespeople respond to my “no” and whether or not they try to:

Discount the Word “No” or refuse to accept the word no.

Most of these callers counter my “no” with asking when they can call again or by telling me when they plan on calling again. Others ask for the reason behind my “no” or push for a face-to-face meeting. Recently a caller told me I sounded angry – well yeah - I thought I was answering an important phone call and instead had to tell you for the 3rd time I wasn’t interested in your paperless document system.

For the most part, these calls are harmless interruptions. My “no” is on behalf of my organization, so no matter what a salesperson says or tactic they use they will not be able to manipulate their way into working with my company. This isn’t always the case in our personal lives and sometimes these conversations can be manipulative and damaging.

Take Michelle Shaeffer's story for instance:
When Michelle refused to work with a potential business coach the coach called her a liar and told her she’d never succeed. This conversation was so damaging it left Michelle in tears and full of self-doubt for weeks. She felt like a complete failure, didn't know what to do except give up and almost did. 

Several warning signs Gavin de Becker provides in The Gift of Fear help us conclude this sales person is manipulative and not to be trusted:

Michelle’s intuition told her so:
One of the reasons Michelle initially declined to work with this coach was because she wasn't sure they were the right fit to work together. Clearly Michelle’s intuition kicked in and was telling her something was off with this relationship.

The Unsolicited Promise:
This coach offered a "no pitch" strategy session claiming she wasn't going to sell during her introductory call. Sounds to me like she was saying I’m not going to sell you anything, I promise.

Discounting the word “No”:
When Michelle declined and explained why, the coach told her she had to put the program on a credit card if she really wanted to reach the goals she'd shared with her. The coach was refusing to accept Michelle’s no.

Typecasting:
When Michelle told the coach she didn’t have a credit card. The coach responded with, "Everyone has credit cards" and if Michelle wasn't willing to be honest she’d never succeed in business.” Typecasting always involves a slight insult and usually one that is easy to refute. The coach wanted Michelle to refute the statement “she’d never succeed” by producing a credit card.

After reading Gavin’s book I hope to be more cognizant of manipulative sales tactics in the future. Instead of taking criticisms and insults to heart, I hope to use them to conclude this is not someone I want to work with.

How to know you are hiring the right coach?
In Ann Daly’s recent post The Secret to Hiring the Right Coach she offers the following advice:

When I was searching for a post-divorce therapist, I asked my friend Dusty--herself a therapist--what I should look for in an initial session. How would I know if the therapist was offering me value? Dusty's response was immediate: "You should get at least one fresh way of thinking about your situation."

And that's the one thing you should get from your first conversation with a coach, too. If you don't, keep looking. Reputable coaches won't charge you for an informational consultation.

Thanks Ann for that excellent advice. 

You can read Michelle’s post, "She Called Me a Liar and Said I'd Never Succeed" in its entirety here.

Have you encountered a salesperson that refused to hear “no”?

If you enjoyed this post you may also like:
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The Biggest Money Mistake Women Make

I’ve recently read several articles revealing women’s money mistakes; not saving enough for retirement, incurring too much debt, giving money to family members, taking on children’s debts by co-signing their loans, and relying on the men in their lives to handle finances and investments. While spending too much on handbags and not knowing how much your husband’s 401(k) is worth are not smart money practices, I feel the biggest money mistake a woman can make is:

Not negotiating a higher salary
 

According to Linda Babcock and Sara Laschever in their book Women Don't Ask: The High Cost of Avoiding Negotiation--and Positive Strategies for Change:

By not negotiating a first salary, an individual stands to lose more than $500,000 by age 60—and men are more than four times as likely as women to negotiate a first salary.

$500,000 could have bought a lot of overpriced handbags over the course of a women’s life. In addition to earning less in wages, not negotiating a higher salary leads to women contributing less to their 401(k) plans, receiving smaller 401(k) matching contributions and earning smaller social security credits.

Linda Babcock and Sara Laschever also reveal:

• Many women are so grateful to be offered a job that they accept what they are offered and don't negotiate their salaries.
• Women often don't know the market value of their work: Women report salary expectations between 3 and 32 percent lower than those of men for the same jobs; men expect to earn 13 percent more than women during their first year of full-time work and 32 percent more at their career peaks.

This was certainly true in my case. I’ve never negotiated for a higher salary not once. When I started out in my career I had no idea what I was worth – my confidence was so low upon graduating from college I actually thought I was unemployable. When I was offered my first real job at $6.29 an hour in 1986 I was happy to just be employed.

 

I wasn’t the only woman not negotiating:

My second job a year later paid $14,500 a year. I thought this was low until my female co-worker hired a few months prior with similar qualifications disclosed she was earning even less.
 

As my career progressed I continued to avoid negotiating salary:

Once I became a CPA in the late 90’s, I relied on my credentials to ensure I was paid a fair wage. I was working at an engineering firm when I obtained my CPA license.  Shortly afterwards my employer fired my manager who they thought was lazy and offered me his job. My new annual salary would be $35,000, a 9% increase over my current salary of $32,000. My former lazy manager had been making $75,000 a year. I accepted this position without questioning my new salary, researching the market or negotiating for more.

 

Other attitudes at the time:

One of my female co-workers, ten years my senior and our company’s office manager offered the following advice:

She felt it was preferable to make a lower salary than what you were worth because in doing so you were insuring employment. Throughout her career she had witnessed numerous individuals who were underpaid be the first to be hired and the last to be let go when layoffs came around. In her opinion, the highest paid employee was always the first one fired.

Why this advice is so horrible?

Unfortunately, I think she mistook highest paid for overpaid. In the recent economic downturn, in addition to down-sizing every employee who wasn’t absolutely necessary many employers reduced the salaries of their remaining employees. Now an underpaid employee was earning even less. Salary-cuts at my current company remained in effect for three years. I lost $15,000 in gross wages. Already on the low end of the salary scale, during the salary reduction years I was substantially underpaid for my position and work experience.

 

Men in my circles do negotiate more often:

Last year my husband received the standard cost-of-living raise during his salary review. At the end of his meeting he expressed displeasure with his raise, reiterated his yearly accomplishments and told his manager he had been expecting more. His manager agreed to think over his decision and get back to him. I was astonished. Never in my life would I have asked for more money. His company was still struggling, despite my husband’s project going well; how could he expect more money. My husband felt differently. He was working on one of the most important projects of his career at this company. There was never a better time to ask for more money besides what did he have to lose. He was right and ended up receiving the raise he had been expecting.

 

While raises have been frozen at my company for four years:

Three male managers I know of have asked for more money. One was flat-out refused – he handled the negotiations so poorly he eventually was demoted; one was denied then given a surprise year-end bonus of $10,000 and the third received exactly what he asked for.

 

Linda Babcock and Sara Laschever make the point that the male approach to negotiating isn’t actually superior to women’s:

Men are not better negotiators than women. Women more often than men take a "collaborative" or cooperative approach to negotiation that has been shown to produce agreements that are better for both sides. Women are more likely than men to listen to the needs and concerns of the other side, communicate their own priorities and pressures, and try to find solutions that benefit all parties—to find the win/win solutions. This approach not only leads to better outcomes for everyone, it often produces creative solutions to problems that might have been overlooked by men taking a more competitive or adversarial approach. Also, by looking for those win/win solutions, women tend to preserve and enhance long-term business relationships—they don't burn as many bridges as men who focus on short-term gains.

It is also important to note:

 

Failing to negotiate is not just a boomer problem:

Younger women may assume that things have changed far more than they have, but according to Babcock and Laschever studies among men and women in their 20s and early 30s, men are much more likely to initiate negotiations than women.

  

Don’t forget to negotiate your bonus:

In addition to negotiating salary, many jobs now come with a pre-negotiated bonus plan. Women may think they are being paid a fair salary, but are  unaware their male counterparts negotiated and are earning a much higher year-end bonus. While researching salaries with your networks don’t forget to collect information on bonus plans. 

 

Have you ever attempted to negotiate a higher salary? What was the result? What do you feel is the biggest money mistake women make?

 

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