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Accepting counter offer
8

Accepting counter offer

Accepting counter offer

(OP)
Hi basically I have been offered a job usual story current employer when I said I was leaving matched the offer. Some more details;
New job is smaller company so less fringe benefits
Its more responsibility which is what I want.
If my employer had been paying me this amount to start with I probably wouldn't have looked around.
I know very little about the new company except what I saw at interview
There are only three qualified engineers there
I am generally happy at my existing place but tying to drive my career forward and see if I could get also more money.
Existing is heavily into bim but the new being smaller hasn't really touched I as yet.
New is further away from home so will cost me more in travel to work in money and time.
I have verbally accepted. But not in writing.
If this had happened before I verbally accepted I may still have gone. I truly do not know what I want to do and hard a hard time Accepting first time.
Could I in any way pull out now anyway? I feel I can't even if that becomes my preferred option.
Any thought are welcome.

RE: Accepting counter offer

You are still free to do what you want as nothing is in writing. Personally my word is my bond in both business and my personal life, I always try to treat others as I would have them treat me and I don’t like being lied to. How you treat others is up to you, but expect to be judged by it and it may come back to bite you one day.

In my experience money alone does not make you happy and in a few weeks/ months whatever else was annoying you at your current job will probably start doing so again, but it does seem like you almost used the second company to get more money out of your current employer rather than actually really wanting the job.

I think you need to sit down and work out what it is you really want and what is the best way to get there.

RE: Accepting counter offer

Acceptance is acceptance. In writing. Verbal. It really doesn't matter. This happened to me a couple of times and it really pissed me off. Both times I kept the resume's after they didn't take the job. One of the children applied for a different job a few years later and I made certain that we strung him along as long as humanly possible and then rejected him--petty? You bet it was, and it felt really good.

Companies may be legal entities without feelings or memory, but they are made up of people who have all sorts of feelings and pretty good memories for the most part. You are going to do what you want, but remember that grown-ups get to live with the consequences of their decisions.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Accepting counter offer

(OP)
That's what I'm thinking to be honest although I obviously have a duty to my family also.
And I did not use it to get a counter offer. I was going to discuss my concerns in jan but this job posting came up and I went along not thinking I would get it but more out of interest. The existing job is def more family friendly for me. But one of the positives of more money for my family has been removed and now I'd be financially better off staying.

RE: Accepting counter offer

Had you not already accepted, I would have counseled you to decline any counter offer.

Mike Halloran
Pembroke Pines, FL, USA

RE: Accepting counter offer

Sounds to me like your confused about what decisions to make now you have the "money" from both companies. Man up and do the right thing and you know what this is, stop looking for excuses. Verbal is as good as written, this make no difference, it is just that early withdrawal from an employment contract is very rarely penalized, However I know some companies are putting in cost recovery clauses just for situations like this.

http://www.nceng.com.au/
"Programming today is a race between software engineers striving to build bigger and better idiot-proof programs, and the Universe trying to produce bigger and better idiots. So far, the Universe is winning."

RE: Accepting counter offer

Which company is more likely to increase your salary in the future ... without having to resort to "threaten" to leave for a better offer?

RE: Accepting counter offer

(OP)
I have taken the job and rejected the counter offer. Thanks for all the advice.

RE: Accepting counter offer

Having a personal standard and holding to it is sometimes temporarily painful, but will rarely be regretted in the long term.

Best luck to you!

It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.

RE: Accepting counter offer

ukengineer58 (Civil/Environmental)
I think that is the better plan. Counter offers usually give a company time to work on getting rid of you, at their convenience. You have already demonstrated that you will leave anyway, if the opportunity presents itself.
Good luck in your new job.
B.E.

You are judged not by what you know, but by what you can do.

RE: Accepting counter offer

As mentioned earlier, taking a counter-offer is typically a bad idea.

However, once you have been in the new job a couple of years - there's nothing wrong with going back to the first company (though I would expect a further salary bump to do so.)

RE: Accepting counter offer

Based upon the information you provided, it sounds like staying at your current place of business is the best choice. There appear to be a lot of additional costs associated with the new job (e.g., fringe benefits, additional travel time, unknown issues).

Unfortunately, you have accepted the offer for the new job verbally before getting the counter-offer, thus your conumdrum. If you hadn't accepted the offer, I think you'd have more options. Probably your best hope is to leave your current job on the best of terms, in case the new job fails.

RE: Accepting counter offer

You decided you wanted a new job so you looked for one.
You decided to go on an interview, to get this new job.
You decided to accept a new job
You decided to tell your current employer that you accepted a new job.

Why do you think you need to make another decision?
The decisions have already been made.

Charlie
www.facsco.com

RE: Accepting counter offer

(OP)
Thamks for all the advice guys. Engs tips to the rescue again. Only comment i will make is i am shocked at how personnel some people take a business decision. Zdas i have to say you sound very bitter about a simple decision that someone is entitled to take, in fact without knowing you id be as bold to say he had a lucky escape not working for you if you'd blackball his kids years later.
I think it works different in US than uk where you need good cause to sack someone, i.e. position is made redundant or gross misconduct. You cannot in a years time take revenge and march them out he door and replace them. That would be unlawful.

RE: Accepting counter offer

Not bitter at all. I just feel very strongly that honesty is important, and you if demonstrate you are unwilling to honor your word once then I really can't see any reason to EVER give you a second chance to lie to me. I've never had a dishonest person working for me (i.e., everyone who ever worked for me lived up to the commitments that they made freely). I don't know what I would have done to someone who didn't live up to those simple expectations. I really believe that an Engineer without integrity is a waste of air.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

RE: Accepting counter offer

(OP)
Yet you wouldn't seem to consider it dishonest to, in your words string his Children along. An interesting contradiction. If you lived so strongly by your values surely you could have rejected them straight off or been honest with them about why you won't consider them.
Maybe even his children also would have thought he was out of line. Either way seems honesty only works one way for you.

RE: Accepting counter offer

"an Engineer without integrity is a waste of air".

Pretty much nails it for any profession. Personal life, too. Naked you came, naked you'll go, money and possessions are a temporary salve, all we have is our word.

One of my favorite quotes:
Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become character. Watch your character, for it becomes your destiny.

-Author Unknown

It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.

RE: Accepting counter offer

ukengineer58,
WHAT THE HECK ARE YOU TALKING ABOUT? Did you tell a prospective employer that you would take a job and then lie to your children? Shame on you. Did you tell your children that you wouldn't take the job and then tell the prospective employer that you would? Shame on you.

The time to "consider his children" was BEFORE accepting the offer. Not after.

When I found myself in a position where I couldn't tell my children the truth (e.g., "What did you get me for Christmas, daddy?") I told them nothing (e.g., "that is not a subject I'm willing to discuss with you"). That kind of eliminates the ethical problem that you are implying.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

RE: Accepting counter offer

Pretty sure there is a misunderstanding about the "children" comment. Zdas did not take anything out on the applicant's children, the applicant may not even have children. He is calling the applicant a child, as in not an adult, and that same "child" applied again with results as described. Sounded fair to me. Fair doesn't quite cover it, try justice (or karma if you believe in it.)

P.S. if breaking your word after accepting a job offer is nothing more than a business decision, then selling your soul for wealth is just a good financial decision.

RE: Accepting counter offer

What 1gibson says, Zdas initial post was a little unclear, but he was basically saying that the applicant changing their mind about accepting the position was not an adult thing to do.

Not sure if it's the old line about 2 countries divided by a common language or not though.

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Accepting counter offer

(OP)
Guys maybe I misread the post. Maybe Zdas can clear up whether he was speaking metophorically or literally. I'd also like to point I meant no offence I know nothing about Zdas and was mealy commenting on the post as it read to me not as Zdas as a person, although I still believe that the follow up actions of stringing the guy along were more dishonest than what the job hunter did in that it was deliberately carried out to cause distress. The type of action being condemned. I don't see how you can have it both ways.
On a more general point there are plenty of employers advertising jobs and interviewing to satisfy procedure when they already know who's getting the job and plenty of ghost jobs advertised for months just fishing for a perfect person with no actual role available. Employers will quickly ditch someone when financially it's Better for them to do so, I doubt word is my bond holds much weight, maybe for sole owner type businesses they might try and keep you longer but having gone through redundancy process at larger companies there is no sentiment no looking at personal circumstances no thinking he turned down a counter offer two years ago. It's how the numbers stack up and their gone.
I've taken the new job as it's the best option for me. Loyalty from most companies is gone. Ethically I expect the contract to be stuck to no more.

RE: Accepting counter offer

Be aware that verbal acceptance of a contract in some countries is considered the same as written.

http://www.nceng.com.au/
"Programming today is a race between software engineers striving to build bigger and better idiot-proof programs, and the Universe trying to produce bigger and better idiots. So far, the Universe is winning."

RE: Accepting counter offer

ukengineer,
I'm just not sure what you want me to clarify. The only "children" I mentioned in my original post were the immature chooms who felt they could use me as a bargaining chip without any consequences.

Your statement that since management was not loyal to you you have no obligation towards loyalty is one of the most self-serving and damaging statements that I hear. That is like saying "someone may rob me at gunpoint someday so it is OK if I rob someone at gunpoint today". Your actions are totally under your control. Your reactions are also under your control. The actions of your management are not under your control. The era of implied lifetime engagement actually ended with WWI and was completely dead by the start of the Great Depression. Anyone who expects to be kept on when their employer does not have viable way to convert the salaries paid into profits is begging to lose their job through bankruptcy instead of layoffs. OK so we know that an employer must make a profit to be able to pay salaries, the actions that the company takes to try to ensure projected profits are up to the owners of the company. On the other hand, an employee that ignores these facts is simply stupid. You should keep your CV current. You should engage in any training available (I took this to the point of paying for it myself if my employer did not feel that it would make me more useful to him). You should engage in professional societies, You should keep an eye on the job market through occasional trips to LinkedIn or similar pages. What you should not do is say "they have no loyalty to me so I won't have any loyalty to them" while you are stealing paper clips and 3-ring binders. That mindset is simply corrosive.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

RE: Accepting counter offer

3
(OP)
I think in general we agree on how to behave however I was as I like to do reversing it from the other side.
You seem to think you were grated badly by an applicant and somehow they should expect it to come back to bite them. Then you admit to messing them about in return. If the principles were so high why not just ignore their application.
You would have had the morale high ground if you had.
I also find you analogy I comparing doing something something illegal with doing something within a persons legal rights a tad ridiculous.
I don't expect a job for life. Likewise I don't expect any special treatment above what's in a contract. Outside of that framework both parties can do what the hell they like. For instance I it's financial beneficial, either short or longer term for a company to terminate someone's employment they will. I see no reason why an employee should not be able to judge any situation on its same merits. That exists pre or post contract within the agreed framework.

RE: Accepting counter offer

As an engineer that has worked for over 20 different companies in the last 25 years, I'd recommend that you graciously thank your current employer for the generous counter offer, but then tell him that you have already committed to the other company. You should understand that the damage was done when you told your current employer you were leaving. Even if you were to accept the counter offer, things would never be the same between you and your current employer.

And in the future, always make sure you have an iron-clad offer in writing from your prospective employer before quitting your existing job. Also, make sure you leave your current job on good terms. Give as much notice as possible and don't leave the company hanging.

RE: Accepting counter offer

"To thine own self be true" seems like the proper attitude in this situation. If you have realized that the decision to change employers is not the right one, it is better to notify the prospective employer immediately and let them know that you have given additional thought to the matter and determined that the decision must be reversed. I would much rather have a new employee back out before arriving than to stay for some polite period of time and then leave. Nobody wins in that case.

RE: Accepting counter offer

(OP)
okay, 2 scenarios of 'doing the right thing', I think linked to this subject and intersting where the boundries should lie.

Number 1) you get offered a job but are currently working on a major very important scheme for your current employer. You leaving as a key player would cause major delivery issues. Do you leave (serving your contracted notice period), knowing you are leaving them in the lurch or do you need to remain 'loyal'. Partically interested in the members such as Zdas as empoyeers on if your name would be on the list of people cut out of future consideration in this circumstance.

Number 2) you move employees which obviously carries some risk. You need to serve a probabtion period. During that time the company has a reorganisation or loses some work. They terminate you. How does that sit with the scenario that the employee should stand by his word, whether implied or verbal, in addition to contract provision and the previous comments on this thread.

Be intersted how in particaular 'empoyers' either owners or management view these scenarios.

RE: Accepting counter offer

You are the only one that cares about your career. It is yours to manage. Deciding to stay or leave a current job is part of a rational analysis. From an employers perspective there is never a good time to lose a key employee, but the employer should have thought about that before creating a salary, benefits, or work hours environment that causes people to start looking for alternatives. I had a boss once who doubled my salary the first year I worked for him, I asked him what that was all about and he said "if you are thinking about what I'm paying you, you are not thinking about what I'm paying you to think about. I want to price you out of the marketplace". It is really nice to be appreciated and that is the only time in my career that my CV wasn't current. So, in your first scenario, there was a reason you were looking, you accepted another position, you give your current employer notice and either start working on training your replacement, work on getting files current, or pack your boxes--employers choice. The only "loyalty" in this scenario is loyalty to your personal integrity.

Shit happens. It sucks when it does. But you rolled the dice when you decided to change jobs. Sometimes it doesn't work out. I haven't seen your employment contract, but I doubt it is structured like an NFL contract where they have to pay for 5 years even if they cut you. You've obligated yourself to do your best for them. They've obligated the company to pay you a negotiated amount for your labor. If the labor stops, then the pay stops. It is easy to feel betrayed or victimized in that scenario, but it is simply a bad outcome of a decision.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

RE: Accepting counter offer

(OP)
Zdas, I think we are starting to agree. I wouldn't feel victimised. I only expect to be paid for the job under the conditions of the contract and to get the required notice under that contract. My point is that it works the other way as well. There is no obligation for an employee to accept a job if the contract is not signed regardless of any percieved or emotional, if you will, assumed commitment.And if the basis of that decision changes, by something in the contract wording or a counter offer then they can change their mind.
Likewise I do not work on implied terms for anything. Is it written down and confirmed? no, then it doesn't exist. That way it takes out any feelings of being betrayed etc from it. It is simply a business decision.

I think your point about salary's is a very good one and your previous boss I think has the right idea. Amazing how many empoyers bleat about not being able to find anyone good enough by merely offering the going rate. Surely all the good ones are already working for the going rate at their exiting place. Same when they lose someone they want to keep but were not paying them a little above the going to ensure they were not going to get more by moving. Intersting article I read couple of weeks ago by an employer. His first discussion at review or at interview was 'how much do you feel we should be paying you'. In his mind take the money issue away and you'll have people who will join and stay.

RE: Accepting counter offer

To answer the two scenarios from another employers (and ex employees) perspective.

Number 1 is fine, you are contracted to give a certain amount of notice, as is the company so provided you or they do that then it is fine. Anyone who would be really difficult to replace will be on at least three months notice anyway, so that gives time for a contingency plan to be put in place. As has been said there is never a good time to lose a valuable member of a team but it happens. Any one of us could die in a car tomorrow and the world would still go on.

Number 2 is fine also, the probationary period is exactly that, the employer can let the worker go without normal procedures and the employee can walk away can also walk away. This is not as one sided as you make out, the company might have made a very tight call between to potential employees and by the one they offered the job too leaving they have lost both time and money in appointing and training them and possibly also lost the chance to take the other person on. But that is the risk from their side.

I totally disagree with your last post; a verbal agreement is actually binding by UK law. However it is so hard to prove it is hardly ever worth while pursuing. That does not make it morally right for someone who has accepted a job to now reject it, or for a company that has offered the job to retract the offer. I am not saying both don’t happen but it is not morally right.

Paying anyone double the going rate is just bad business, pure and simple. It is no different to paying twice as much as you need to for rent, office supplies or utilities it might make the person you are paying happy but it puts the company in a worse position than it should be.

RE: Accepting counter offer

ajack1,
We were on the same page till the last paragraph. PEOPLE ARE NOT COMMODITIES. I've had employees that were worth 50 times the going rate and employees who were grossly overpaid at 1/2 the going rate. I always tried to get people's salaries at multiple of published industry averages. The guy that saw he was making 125-250% of average felt really good. The guy making 75% of average either came to talk to me or talked to a recruiter behind my back. I was fine with either. The ones that came to talk to me got the "have you contributed as much to the project as you've been paid?" talk. Some took it to heart and changed their ways, some took it to heart and left, others just grumbled until I found that they needed to be in a different role.

And if your comment was about my salary getting doubled, it actually went from about 65% of average to over 125% of average. Basically from a bone of contention to a steak on the grill.

The old Dilbert where the pointy haired boss says "We want the very best talent in the industry", to which Dilbert responded "But you are proud of paying below industry average salaries?", and the classic response "We want them clever but without a clue" is on point. If you want quality people, you have to pay for them.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

RE: Accepting counter offer

We do pay job shoppers about ~25% to 50% more, since the job shop has to take its skim, and there's possibly some negotiation on the rates to compensate for the lack of insuramce, etc., but in the end, the company is still ahead, because it's internal contract rate is running about 3x salary, so someone coming in at 2x salary, net, is still cheaper than a full time engineer. This does create a disparity between the apparent salary, because the internal guy sees his 1x salary, while he sees a job shopper get 2x what he's getting, but that's actually not the true salary of the job shopper.

TTFN
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RE: Accepting counter offer

We will just have to disagree on that zdas04, I am not sure how your business is run or what margins you operate on but anyone however good they are earning 50 times the going rate would be costing me a fortune. I would be intrigued how you would make money out of them.

Doubling a salary obviously depends on where you start but to end up at 125% of the market norm, I would not consider puts you in the “priced out of the marketplace” bracket. Very nice to be well thought of and nice to get the extra money but within the “limits” I would consider acceptable.

Paying people more does not make them better workers or better at their job and personally I would not pay anyone twice the going rate, if only for the bad feeling it would generate amongst others. However I would say that is assuming all other benefits are the same, if it was a contractor or someone not getting holidays or paying their own tax that is different, at least in my view.

RE: Accepting counter offer

Paying people more can very well make them better workers - especially if it takes them out of the "scraping by month to month" category. They no longer have to worry so much, and can focus more on the job at hand instead of barely making rent + car + student loans + food.

RE: Accepting counter offer

Paying someone "too much" won't necessarily make them a better worker (personally I think it would) but not paying them enough will certainly hinder their desire to improve, or maintain the quality/quantity, of their work product.

Don't want to do it because it will make other people jealous? Get rid of the whiners, and then reward the ones that strive to improve because they know their employer will recognize and acknowledge this improvement by paying a higher salary.

Paying someone double the norm is another story, the justification there is retention. So if they are more than twice as good as someone fresh off the street, maybe even twice as good as their coworkers, then that is the comparison that needs to be made. If they are also twice as fast, then 2x salary plus 1x benefits package is a bargain, you still come out ahead compared to hiring 2 new people to do the rock star's job after they are out the door.

RE: Accepting counter offer

I charge A LOT for my consulting. No apologies and every time someone has thought my hourly rate was too high, I would estimate the hours their job should cost, double it, add 50% to the inflated value (just because I could), and then multiply the new number times my very high hourly rate and present it as a hard dollar bid. I've never failed to get a bid using that algorithm and a couple of times people have told me after the fact that my bid was less than 1/4 of the big Engineering houses (and every time my projects have been completed on time, for the agreed amount, and met or exceeded the original scope). About half the difference is that I don't have to charge in 7 layers of management, but the rest is simply effectiveness. I've never done a project for anyone that their benefits were not at least 10 times what they paid me, and 100 times is more common. I've known several dozen Engineers over the years that provided similar results. Paying one of those guys twice the going rate is a bargain. I've also known far too many Engineers that paying them half the going rate was a waste of money.

PEOPLE ARE NOT COMMODITIES. We each come with our own skills, weaknesses, strengths, and body odors. An Engineer willing to work for "scale" is most likely an Engineer you don't want to hire. An Engineer with the arrogance to write his own ticket, going rate be damned, is likely to add a bunch of value.

I'm betting that even in Automotive the guy that came up with the electric starter was worth more to his employer than the guy who added a rotating hand grip to the hand crank starter.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

RE: Accepting counter offer

PLEASE STOP SHOUTING, IT IS RUDE. I understand added value and I also understand the sort of mark ups businesses need to make, what I cannot understand is how paying someone 50 times market rate works, maybe you could actually explain that without shouting?

If you actually look at most surveys what makes people happy is being paid a similar amount to those around them. Some people are worth more but not 100% more unless you are employing the wrong people. Again this applies to like for like, not a contractor v an employee or someone with years of experience v a new grad.

RE: Accepting counter offer

I've used the same algorithm as zdas04 when estimating time to complete tasks... seems to work out more often than not.

“Know the rules well, so you can break them effectively.”
-Dalai Lama XIV

RE: Accepting counter offer

ajack - you are misinterpreting the statement. It was stated the employee was worth 50x the going rate, not that they actually were being paid that amount.

With my position, I rarely get hard dollar feedback. I did get one last year - by spending at most 10 hours of my time on a problem and convincing someone else to spend $2,500 on a better (re)survey, I saved my employer over $2,000,000 they were about to spend.

If I had been paid 500x (let alone 50x) my current hourly compensation for those hours, my employer would still have come out way ahead.

Looked at another way: If I did that one thing, then surfed the internet and napped for 10 years at my current pay rate, they still would come out ahead (including overhead, et cetera.)

I do similar things fairly regularly - this was just one where I got involved late enough that there was already a bid estimate in place.

RE: Accepting counter offer

I recently had a client pay me for a day's work ($1,800) for a recommendation that reduced their project costs by $7 billion (on a $25 billion project). My GasBuster is reducing a wellsite cost for one client from $2.5 million to $125 k. Not bad for a field projected to have 6,000 wells. Is that worth twice the going rate? I would think so, since in both of these examples my client had already paid the going rate for designs that did not honor the realities of the reservoir, so they paid 3 times the going rate to get my solutions.

I charge a lot, my clients keep calling me back, so I must be worth it. People are not commodities and to think that they are is to think wrong. When I hire someone I ask "what will his contribution minus his salary do to my bottom line?" not "can I get him for less than scale?". Average compensation is for average people. I don't hire any of those.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

RE: Accepting counter offer

I actually don’t think people are commodities but not for the reason you state. Like you if hiring someone I ask “what will their (no sexual discrimination in my company) contribution minus their salary do to my bottom line?” However if I was looking to buy a piece of machinery I would also ask the same question, obviously after cost is deducted not salary. It still remains a pure business decision and in that sense a person is no different to a piece of equipment, it is how they affect the bottom line not just which is cheapest.

I guess the other place we really differ is how we define worth. To use your example and also make some assumptions that may be wrong. If you can get $1,800 for a day’s work that will provide you with a very nice income if you own the company, take a wage and share of the profits. If however someone is working for you and we say a day is eight hours and you have a 3 x salary mark up, neither of which seem unreasonable to me, then you are paying them $56.25/ hour. Now I don’t know what the going rate is in your field or country but I would guess that is around average.

So is that person worth $56 / hour, $225 / hour or $7 billion? My take is they are worth what someone is prepared to pay them.

RE: Accepting counter offer

None of your assumptions are correct:
  • It I purchase a bulldozer, I have a reasonable expectation that it will perform similar to every other bulldozer of that size that I've ever purchased
  • If I hire an Engineer, I don't have any expectation that they will perform like every other Engineer
  • My company is a sole proprietorship. I don't have employees. Everything that comes in can go out as owner's dispersal or a business expense. Something like 40% of gross revenue goes into running the business (mostly income taxes and airplane rides, the only office is off my garage). That means that my (after tax) income is closer to $135/hour than $56/hr. Dang, I guess I'm "worth" twice the going rate.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

RE: Accepting counter offer

"So is that person worth $56 / hour, $225 / hour or $7 billion? My take is they are worth what someone is prepared to pay them."

And that someone probably won't be you, and you'll lose your best people because of it.

That might be the missing link that explains the difference of opinion.

RE: Accepting counter offer

I actually don’t think either of my assumptions are wrong.

If you truly believe that all computers or milling machines or example are the same regardless of price and specification then I am probably wasting my time discussing anything with you, however you come across as an intelligent person so I don’t think you do believe that.

I did say if you own the company take a wage and share of the profits then that will provide a very nice income for you, that is my understanding of a sole proprietor, however it may have a different meaning outside the UK in which case I accept I may be wrong. But I thought the point was what employees were worth, if you were employing someone I doubt you would be paying them $135/ hour on $225 revenue? Even if they saved someone $7 Billion.

1Gibson I would only lose my best people to better pay if someone was prepared to pay them that amount, in which case that would be what they were worth.

RE: Accepting counter offer

When it comes to paying people to perform a job, people are definitely not a commodity. A commodity implies something that is readily interchangeable with any similar good or service. The real value of a person's labor or effort to a business is relative to the amount of revenue or profit it provides.

RE: Accepting counter offer

"A commodity implies something that is readily interchangeable with any similar good or service. "

That is, I believe, the way 99% of all engineers of a specific discipline and grade are treated. The fact that salary grades exist confirm that, i.e., all Engineer IIs are paid x ± y% within a given company.

McDonnell Douglas was famous for doing something that supports this back in the 70s. Every May, they would send out HR recruiters to do campus interviews, apparently without any input from the engineering departments. One June, we got "assigned" a seemingly good BSCS. major from USC. The only problem was that we were doing semiconductor fab, and couldn't possibly keep a programmer from getting bored out of their skull. So, McD agree to find a different home for this person, and assigned us a BSEE from UC Berkeley, with GPA > 4.0. But, as it turns out, they had the all the ambitions and drive of a lump on a log. So, obviously, McD seemingly felt that a BSEE was a BSEE, and our engineering needs and requirements were irrelevant.

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RE: Accepting counter offer

Quote:

1Gibson I would only lose my best people to better pay if someone was prepared to pay them that amount, in which case that would be what they were worth.

Ajack,
So if someone else was willing to pay them more, then that is what the employee is worth.
You are willing to pay employees what they are worth, the employer is just as interchangeable to you as the employees?

If I worked for you and figured that out, I'd interview, email you the highest offer, and ask if you would be matching it for the current pay period, or if it would have to wait for the next one. I guess the trick is not letting your employees figure out your system.

If you don't assign any value to a stable team, and don't assign any cost to training new employees, then it all seems to add up. No system is perfect, but those are some big holes.

RE: Accepting counter offer

1gibson everything has a worth and it is what someone is prepared to pay for it, you learn that pretty quickly if you run a business. That is the same if you are employing someone, negotiating a contract or buying a commodity.

What something or someone is worth to me will not be the same as they are worth to someone else. If I have a contract and you have a specific skill I need you become very valuable to me, if you are the best in the world but I have no need for the skill set you offer or cannot get in a contract that requires that you have less or no value to me, in a business sense.

Of course things like a stable team and training come into the equation as well as loyalty and many other things but only up to a point a business still needs to make money and nothing can cost more than it generates, well okay some things can, but overall they cannot.

If I am bidding on a contract I put in a price someone will decide what I am offering is worth that price or not. If I am looking at employing someone I will make them an offer they will decide if they want to work for that. If someone I offer a job to says I want more than that I will decide if they are worth that to me. If I go and buy a house I will put in an offer and someone will accept it or not, it has nothing to do with the cost of building the house or what they paid for it, it is all down to how much I want it and how much they want to sell it.

Everything is worth what someone is prepared to pay for it.

RE: Accepting counter offer

I understand what you are saying, I was just trying to translate here.

Your position is that people are only worth what you pay them when they hire on. You both agreed to it, why should it ever change? That can't be very good for retention unless you have "standard" raises that are significantly higher than COL. Maybe it isn't an issue if you only hire experienced people who can immediately jump in and take care of business. In that case, your strategy is basically "I can hire anyone to come in and do this at fair market rates" so it would indicate that you do consider employees to be a commodity.

I'm not arguing that it is good or bad, just that everything about your position points to employees being interchangeable.

RE: Accepting counter offer

Ideally, a person gains experience the longer they work in their field. Yes, a contract was made in the beginning for the employee's "worth", and if they were stagnant, than a COL raise would be acceptable... this might hold true for blue-collar jobs, like someone who loads steel plate into a press and stabs a button to mold it, but it certainly doesn't hold true for engineers who are continually pushing the boundaries of their knowledge and able to implement shortcuts they've learned along the way. Any raise above the COL is based upon the new "worth" of the "improved" employee.

Dan - Owner
http://www.Hi-TecDesigns.com

RE: Accepting counter offer

1gibson it really isn’t that black or white. When you take someone on you have both agreed a price however the worth will change more often than the agreed price. There will be times when you make handsomely from them and there will be times when it costs money to have them in your employment. Basically if you make well over a period of time they become more valuable and you try to reflect that in what they earn. If they are costing you money over a period of time they need to go or be paid less.

One of the hardest decisions is when to let good people go, both in a business sense you don’t want to lose good people and as a person it is horrible to have to make someone redundant when you know it will cause them hardship. However the flip side is you are probably saving other peoples jobs by doing this. If you just keep paying more than someone is worth the company goes broke.

I really don’t think it is easy to just replace someone, in fact I know it is not. That doesn’t however change the fact that they cannot dictate conditions to you. People will always leave no matter how much you try to make their working conditions the best you can, people have road accidents and heart attacks or sometimes will leave to be in a different location or to do something they have always dreamt of, the company still needs to function whoever leaves, so in that respect people are commodities.

The COL rise is interesting, it has pretty much been a given and each generation has been better off than the last for a good while now. I think that may have come to an end, but that is probably another subject.

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