Counteroffers: The World's Most Career-Limiting Move

Counteroffers are a CLM (career limiting move) for several reasons. My completely unscientific survey shows 85% of executives accepting a counteroffer are terminated in 12 months or less. Why? Do you really think your employer likes you leveraging them for a few shekels? Let me use two real-life examples to explain why you should never accept a counteroffer.

Example 1: Burning Bridges

John was someone that hammered me for a "C" level job. I get it. As a VP, this would be a significant promotion in title and compensation. He worked for one of clients, so I pushed him off multiple times. Eventually he wore me down.

The first question I ask every candidate, "Would you be open to taking a counteroffer from your current employer? I don't represent executives unless they are 100% to changing jobs." This is an attempt to not waste my client's time on people that are tire kicking or not committed to making a job change. John assured me he was "all in" on this job opportunity.

The interview process took months. John received an outstanding offer on a Friday, and told me he would get me an answer on Monday. That is code for, "I'm taking this job offer to my current employer and telling them to match it or I'm leaving." This is not my first rodeo. I knew exactly what he was going to do. He went from hero to zero in a flash. It takes 10 years to build a relationship and 60 seconds to ruin it. I know what you are thinking, "Godfather, you are angry because you lost the $100,000 commission." I won't lie - that was tough. That is real money. This business puts food on the table and roof over the head for my family. This business supports a dozen national and local charities. But let me tell you about something far more important to me: My reputation. The CEO of the hiring company (my client) called and bit my head off. His company invested six months interviewing John. Now he has to start over.

For John, he has burned several bridges: The hiring company, his current employer, and me. As Walt Disney famously said, "It's a small, small world." Trust me, the gaming/casino business is even smaller. It's all good for John until the next time he needs a job. For me, he is now a former friend. It really knocked me off my game for a couple days. When an acquaintance screws me, I shake it off. When a personal friend screws me, I take it very personally. And what about his current employer? Would you like your employees leveraging you for a salary increase? Most importantly, John assured me 100% he would not take a counteroffer. And without integrity, nothing else matters.

Example 2: Getting Out Over Your Skis

Sue is a real climber. Although she was being paid fairly with her current employer, she is obsessed with making more money. So she interviews with another company. If you take taxes and cost of living into account, the position is a lateral. When she gives notice, her current employer gives her a counteroffer.

She tells the interviewing company she is declining their offer to stay with her current employer. They make an even bigger offer. Dang! Shows how tough the job market is. Once again, she presents the second job offer to her current employer, and shockingly, they match it. Wow!

Right about now you are thinking she is brilliant, yes? Not so fast. With her huge salary bump, her new salary is way above the market rate. What if the company folds or she gets fired? Let's say she was making $250,000, which is the market rate. Now she is making $350,000. The worst part about this is she now thinks she is a $350,000 executive. The job market, which is the worst I have seen in my 21 years, says no. Market rate is $250,000, which she would never accept because in her mind she is a $350,000 employee. The end result will be long-term unemployment until her COBRA runs out and she is forced to take a $250,000 job. Like I said before - not my first rodeo.

We saw this situation most recently with people that bopped over to Fontainebleau Las Vegas and were paid way above market rate. Most are gone. Many have not found jobs because they think they are worth what Fontainebleau paid them. Again, the job market disagrees. In Asia, the same thing. A job in Macau will pay $400,000. That same job in the United States pays $200,000. There are casino executives that came back to the U.S. from Macau demanding huge compensation packages. Many were out of work for two years. Some never worked again.

Lesson Learned: Counteroffers are a CLM

My Dad used to say, "All you have in this life is your word and your reputation." Since the Pandemic, I have been stunned by the candidate behavior. My buddy Rob Bone once asked me, "What is the one thing that has changed with executive recruiting since the Pandemic?" I responded, "I have lost some of my faith in human nature." Candidates lie about their education, experience and compensation. They ask for ridiculous compensation packages that are not justified by their education and experience. And they take counteroffers.

My advice to you: Never, ever take a counteroffer. Most employers make counters for the sole purpose of finding your replacement. You just put them on notice that you are unhappy. Nine times out of ten you will be terminated in the near term.

Never forget: Karma is the most patient gangster.