Don’t Call My Bluff: Leveraging a Job Offer for a Raise

For those looking to increase their earnings, people who don’t know better will provide advice to apply for a new job, get an offer, and use that offer as leverage for a higher salary at your current company. This approach has certainly been known to have the desired outcome—and more often it’s been known to backfire. Leveraging a job offer can be frustrating on numerous fronts: It will likely frustrate the current employer and the company making an offer to someone they think is genuinely interested in working for them. It can also be a frustrating experience for the individual, who may not end up in the situation they expected and wanted. Anyone considering this course of action should weigh the options carefully before going to their employers with ultimatums they aren’t fully prepared to follow through on.

Negotiating for more money on the threat of leaving the organization for a higher-paying job is an activity you do not want to do on a regular basis. It can be done only once at an employer, and if it’s done strategically, it can be beneficial. You’ll discover important information around which of your skills are most marketable, what skills you may be missing, and what areas of expertise you may need to develop and fine tune to remain competitive in the market. You’ll also gain insight into the compensation for your skills in other organizations or industries—this, of course, is the information that makes negotiating with your current company so tempting. But, as in many career-related moves, there are risks to potentially reaping this reward.

If you present the new job offer to your organization as an ultimatum for them to match—or exceed—the compensation, you have to be prepared for the very real chance that your company will refuse and send you on your way. This means you have to do your due diligence ahead of time and be willing to change jobs if that’s the outcome. Make sure you understand the full compensation package before making any decisions. You may be making the equivalent of three dollars more per hour, but perhaps you have to pay the equivalent of two dollars per hour more for your health benefits. Is it worth it? Think of other issues that accompany a job change: Do you have to pay for parking? Will your commuter pass shift to a more expensive option? Are you joining an organization that doesn’t give benefits when yours gave annual bonuses? Organizations offer new employees attractive starting salaries to draw interest to the job, but the raise cycle might stall out after that. When’s the next review? What’s an average raise look like? Will you miss out on a solid raise in the cycle at your old organization? Understanding how the full packages compare is crucial before you start using a new offer as a negotiation tactic.

If you do take the leveraging approach, be prepared for your employer to be unhappy—and for your reputation at work to potentially take a hit. The company will likely wonder what your commitment to the organization is and perhaps be less willing to invest in your career growth if you do end up staying. Or they may not take the bait and refuse to negotiate. If you stay anyway, your colleagues’ perception of your credibility and judgment may be weakened. Perhaps you do actually leave the organization and end up in a job you didn’t really want in the first place since it was just meant to be used as leverage. How will that affect your work satisfaction and long-term career trajectory? Consider all the options and potential outcomes before following this path.

If you enjoy your company’s culture and are challenged and stimulated by the work you do, think about pursuing alternative ways to get a raise at your company before interviewing externally. Show your work ethic and interest in growing and advancing at the organization by seeking development opportunities wherever you can, talking to your manager about increasing your responsibilities, and taking on new projects that will hone important skills and showcase your value to the company. A conversation to negotiate a raise does not necessarily have to include a threat of leaving for another job—instead, prepare to negotiate by highlighting your recent accomplishments, increased responsibilities, and impact on the organization’s success.

Leveraging job offers presents the possibility of a lose-lose situation. You risk not getting the desired raise but staying anyway or leaving and being unhappy with the move. Rather than seeking a short-term solution, focus on your skills and successes at your current company to demonstrate that you’re ready for more responsibility and the corresponding salary increase.