Should you or shouldn't you? How to use a job offer to get a raise

Using a job offer from an external company to get a pay raise from your current employer is an effective technique when done correctly. You have the most leverage and power to negotiate when you have an offer for a higher salary from a different company. 

Chances are, if you are an excellent employee who adds value to the company, your boss will not want to lose you. Not to mention, they do not want the downtime of looking for and training your replacement.  

Knowing if, when, and how to leverage a job offer for a raise will dramatically increase your chances of getting the higher pay you want and so richly deserve.

In this article, you’ll discover:

• Should you leverage a job offer for a raise?

• How do I tell my employer about a competing job offer?

• How do you negotiate a raise using a job offer?

• Should you tell other potential employers that you have an offer?

• How do you write a counter-offer for a raise?

Should you leverage a job offer for a raise?

The question of whether you should leverage a job offer for a raise is subjective. The question should really be whether or not you CAN leverage a job offer for a raise. The answer? Yes, you can. Research shows that it works, likely because this specific type of request is perceived as more legitimate and justified, according to the Harvard Business Review (HBR).

Now that you know you can, deciding whether to actually leverage a job offer for a raise is a personal choice. However, before you go out and put in the time and effort to find a new higher-paying job to leverage a pay raise, talk with your boss first. This could save you painstaking effort if your boss ends up being on board with giving you a pay raise when you ask.

How do I tell my employer about a competing job offer?

So, you have been on the hunt and bagged some big game in the way of new job offers. It is time to tell your boss about the competing job offers. Here are six steps to help you have the discussion and put yourself in a position to transition the conversation to getting a pay raise.

1. Start the process six months prior to your annual review by looking for and obtaining job offers.

2. Schedule a meeting with your boss: be positive and professional but direct, and let your boss know that you are happy in your current position, however you believe you deserve a raise.

3. Let your boss know that you have received a competing job offer with higher pay and you are seriously considering taking the offer.

4. Tell your boss what you want and why you believe you deserve a pay increase.

5. Do not give your boss an ultimatum, but present your case such that your boss will want to keep you at all costs.

How do you negotiate a raise using a job offer? 

Here are six steps to help ease your anxiety and make the process of negotiating a raise with a job offer less stressful.   

1. Be confident

• If you strongly feel you have earned a bump in pay, you should be at peace with your decision to move forward in asking and negotiating for a pay raise. 

2. Research

• Although you are using a job offer to get a raise, you will still want to treat the process as any other salary negotiation. 

• Know your worth. Do your research and learn what others are earning in the same position to determine your market value.

3. Get one or two written offers

• If your strategy is to use a job offer to get a raise, be sure to get a written offer from the hiring company before asking your current boss for a raise. 

4. Meet with your boss

• Once you have an offer in writing, schedule a meeting with your boss to ask for a raise.

• In the meeting, be sure to express the fact that you are happy and want to stay with your current employer.

• Come prepared to discuss your accomplishments and achievements. (Companies are willing to reward qualitative and quantitative results.)

5. Be willing to compromise

• Remember, negotiations are a give-and-take process. Typically, one party does not get all that they want. 

• Successful negotiations are not about having a winner and a loser but coming to a resolution that both parties are satisfied with through compromise.

6. Be prepared to walk away

• After meeting with your boss, the company may not be in the position to meet your salary increase request. 

• If you have your heart set on a financial number and your current company cannot meet your requirements, then you will want to accept the external job offer for more money.

Should you tell other potential employers that you have an offer?

When job hunting and negotiating a salary, you want as much power and leverage as possible. So yes, by all means, tell any other potential employer that you have an offer. 

When you have another offer on the table, it shows that you are in demand and will not be on the job market for very long. This knowledge may kickstart them into overdrive and get you through the interview process sooner with a much more competitive compensation package.

Letting any potential employer know that you have an offer from another company will certainly tip the scales of power in your favor.

How do you write a counter-offer for a raise?

There is research that shows leveraging a job offer for a raise works. However, using this strategy may also kick start a negotiation process with your current employer who may offer you a pay increase lower than you requested.

Here is a sample letter of how to professionally counter a lower salary offer.

Key takeaways

1. Knowing if, when, and how to leverage a job offer for a raise will dramatically increase your chances of getting the higher pay you want and deserve. You may never have as much power to negotiate as when you have a job offer from another company.

2. Research shows that leveraging a job offer to get a raise works because you are perceived as more valuable.

3. When using a job offer to get a raise, be confident, be prepared, get written offers, meet with your boss, be willing to compromise, and be prepared to walk away if necessary.

4. If you’re actively interviewing, definitely let all potential employers know that you have an offer on the table. It shows that you are in demand and gives you more power in salary discussions.

5. Should you be offered a raise lower than requested, it’s acceptable to present a counter-offer in writing.