If companies can afford a counter offer, why don't they pay that before the employee departs?

manpreet Best Answer 2 years ago

I've noticed something bizarre at two workplaces. As soon as I decide to quit, a cache of bonuses and perks unlocks. This seems bizarre to me because, if I was so important to keep around, then why not make those things available while I was happy instead of waiting to the very last minute when very little can be done?

At this point, my mind is made up and throwing money my way is solidifying the decision to leave even more. I feel they could have been giving me that money throughout my tenure at the company but instead they were holding out.

I know that sounds like the lyrics of a very bad song but I'm curious to know if this is considered standard practice. If it is then there is a giant loophole at almost all corporations waiting to be exploited.

manpreet 2 years ago

This seems bizarre to me because if I was so important to keep around then why not make those things available to me while I was happy to work there instead of waiting to the very last minute when very little can be done to keep me around.

Let's face facts: that companies pay you at all is because if they didn't, you'd work for someone who would (and legal reasons). So companies will pay you just enough that you'll work for them rather than their competitors. The gotcha here is of course that companies don't have a crystal clear view of what their competitors are offering, and they certainly don't have a clear understanding of what youvalue.

So companies make their best guess. "We think $80k a year and 3 weeks PTO is enough to keep Bob from going to EvilCorp." And they're usually right. It's not that they couldn't offer $100k, or 5 weeks PTO - but remember that the goal of the company is not just to keep talent, but to do so in the most profitable way.

Add in that the fact you're paying Bob $100k might get out to Bill (who does the same job), and suddenly Bill wants that much or will leave because you're treating people unfairly. This isn't a giant loophole as much as a fact of modern labor markets, and the reason that "negotiate every offer" is a key recommendation these days.