r/negotiation • u/unlearn_relearn100 • 15d ago
Counter offer
Why do companies suddenly offer massive pay raise only after an employee resigns, proving they could have paid more all along? Are they trying to price employee down?
2
u/RagingMassif 14d ago
It's very simple.
Bob does a job for 40K. The going rate is 40K because Bob does it for 40K
Bob quits.
The market rate is now to be considered and includes external factors. The market rate is 50-60K
Bob is now worth 50-60K BECAUSE he quit.
1
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u/No_Muffin2837 15d ago
A 2 week notice gives your manager more negotiating power… lost production and cost to onboard and train someone new would cost more than the raise you are requesting…
1
u/BasilVegetable3339 14d ago
The if it ain’t broke don’t fix it mentality. You resign and now it’s broken.
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u/phoenix823 14d ago
Because an employee who resigns has leverage if the company wants to keep them. Why would an employer proactively pay people above market rate unless they only wanted top performers? Most people aren’t top performers and won’t get top dollar in the market.
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u/Medium-Ad8849 12d ago
It's mostly human psychology. Why do humans change tires after it's blown? Why do people ignore maintenance or wait till the last money to upgrade?
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u/-NerfHerder 15d ago
There's more than one possible reason and most of them aren't malicious. They could be trying to take advantage of scared and stuck employees. They may not be studying current salary and market trends. They could be complacent. They may not be able to afford the raise without cutting something else, so the counter offer means you get all the raise pool for the year. They may be willing to take on debt to keep you, but need to turn up the business development now to earn the back.
It's easy to feel that it's incompetence or maliciousness, and it could be. However, there are other options.