Is It Fair to Negotiate Salary After Accepting a Job Offer? Seeking Advice on Handling This Situation

Hello seniors, good morning. I would like to have your suggestion on the following scenario. One candidate accepted our job offer 2 months ago and is supposed to join us in 15 days. However, he has received another offer from Company X with better pay. He contacted us to convey that he received a superior offer but still wishes to work with our company if we can match or exceed the new offer. He was very polite during the conversation and did not make any demands. While he appears to be a strong candidate, the salary increase he is seeking exceeds our current salary structure. Is it ethical to negotiate after accepting our job offer? How should we handle this scenario? Kindly advise.

Changing Employment Paradigms

The paradigms of employment are fast changing in this technology-driven business environment. The concept of 'employee' is being replaced by the concept of 'consultants,' wherein Gen-Y or the millennials love to work more like consultants with the freedom of flexible working hours, expression, thought, and experimentation, and with a commitment to deliver goods on time rather than as a traditional employee bound in a contract under the watchful gaze of a manager. They are conscious of their talent and worth and do not feel shy about jumping onto the wagon of an employer who bids them higher. In the war for talent in the job market, they consider this fair and wait for nobody's nod of approval. So the concept of 'ethics' is also adapting itself to the changing times. 'First matter economics and latter ethics' seems to be the norm now. I could have spared you the strain of reading all this but felt compelled to say it as you raised the issue of ethics.

Evaluating the Employment Decision

Now the question is whether it is worth employing him after his fresh demand for a hike in light of the counteroffer. You are the best judge to make a decision, and not we, though we can provide you with some inputs that may be of help to you. Now set aside the ethics argument because, in all probability, it may not cut ice with the employee as he showed you that he is worth more than what you are willing to offer him. Look at the issue from a sheer business perspective. How did you find the employee in the interview? Is he a top talent? If employed, can he surely add value to your business? What is your need for him? Is it immediate, or can you wait for some time? If you let him go, can you easily find a replacement with a similar job fit and for the same salary which you offered to this candidate? Did you see the letter of the counteroffer, and if so, what is the brand status of that company vis-a-vis yours? This may help you in renegotiating with the employee by telling him that you are a better brand, as you said that the employee was polite and willing to work for you. You need to think of all information/details relevant to making a decision, and it is only you who has to make this decision. It is your road, and you only need to walk to reach the destination, and nobody walks for you.

Regards,
B. Saikumar

HR & Labour Law Consultant

I would suggest letting him go to the company that offers a higher salary based on the candidate. However, it's important not to establish a precedent of renegotiating salary with an employee who has not yet joined. When reading between the lines, it seems like the employee may be engaging in a strategic approach to secure better terms.

In this kind of scenario:

Since the candidate has called you upfront and told you that he has a better offer, you should talk to him diplomatically and ask him to forward you the offer. He may resist this, but you can tell him that since you will need to convince your management to go out of the way and get a one-off approval, you will need the offer letter. You may ask him to meet you face to face and show you the offer as well if he is not comfortable sharing it in soft copy. This way, you will also get a chance to engage with him one-to-one face-to-face and help you understand whether he is speaking the truth or just trying to fool around.

If he is really keen to join your company, he will definitely share the offer details. If he doesn't share, it is best to let him go as you will be setting a wrong precedent and the employee can also create a nuisance value for your organization once onboarded.

Hope this helps.

Regards

Yes! It's his right to demand for more. Some other company is offering him better compensation, so if you want to retain him, you should offer him the same salary as the other company. Otherwise, let him go.

Like Talent Gyaan mentioned, first ascertain whether what this candidate is saying is true or if he is just trying to get a better bargain from your company. Think with your head and not your heart. Some candidates try to take the moral high ground by saying, "Why would I lie?" If there's nothing in writing, the other offer just doesn't exist as far as you are concerned, even if it's from Google.

If you find that he is trying to pull a fast one, you know what to do. Now, presuming he is indeed speaking the truth, that's when you need to discuss with your bosses. I apply the following rules and suggest the same to my clients too.

Step 1: Does he deserve the hike he is asking for?

It depends on his interview performances. If yes, go to Step 2; else, drop him.

Step 2: Can the company afford the hiked figure?

If no, drop him. If yes, go to Step 3.

Step 3: Do you expect any backlash from existing employees?

If no, go ahead to make the new offer. If yes, then can the company handle it, with the focus being on the 'handling' part and not 'if the backlash comes'.

When you decide to make a new offer, you can package it innovatively, keeping in mind that he doesn't use your offer very soon to speak to another company (loyalty bonus payable after one year, etc., being such measures).

All the best.

Regards,
TS

Subject: Reg. Salary Negotiation - Job Offer

Such a candidate is not suitable for any job offer. The attitude shows that the candidate is not determined and can be driven by any attractive offer at any time. He has lost trust and attachment before joining. So even if he is ready to join as per the earlier contract, I would not prefer to let him join.

Dr. Prasad Bhanage
Sinhgad Institutes
Associate Professor

Changing Ethics in the Modern Workplace

Prima facie, you are absolutely right. Unfortunately, in today's world, the contours and definitions of 'ethics' have changed significantly, leaning more towards being a 'relative' than an 'absolute' attribute of an individual.

Earlier, the bottom line was what you and Nathrao mentioned—even if God gives a counter-offer, the individual would stick to his/her commitment.

Challenges in Hiring Skilled Candidates

Nowadays, from an employer's perspective, securing skilled candidates, especially in technical areas, is so challenging that many companies now offer joining bonuses, which were unheard of earlier. From a candidate's perspective, with so many options available for someone with proven technical abilities, maintaining the same level of commitment from individuals across the board is becoming increasingly difficult.

After all, the company has to run. I would have taken a different stand if it were me. But that doesn't mean others have to follow the same path. Here, Mekala/HR is bound by his/her responsibility towards the company, irrespective of what he/she would have done if it wasn't linked to the company.

Ethical Dilemmas and Responsibilities

In a way, I would equate this scenario to the one in Kurukshetra when Dharma Raja had to announce "Aswathama hathaha.....Kunjaraha" to ensure Arjuna eliminates Drona. Left to himself, Dharma Raja wouldn't have done what he did, nor would there have been any pressure on him to do so, but here he was bound by his dharma towards the Pandava Army.

The point surely is 'where to draw the line,' and that's where each one's perceptions, conclusions, and actions vary. This, I think, would be a better debate, though I'm not sure if there can be any absolute conclusions at the end of the day.

Regards,
TS