How to Successfully Leverage Another Company’s Offer When Negotiating

When it comes to negotiating for a better compensation package from your current employer, one potentially very powerful strategy is to use a better offer from someone else to create a more compelling case. But this can be a tricky line to toe, particularly if you’re ultimately hoping to stay with the company. These tips can help to navigate this potential landmine—and increase your chances of securing a better compensation package without burning bridges. 

Know where you stand

If you’re negotiating with your current company, chances are your ideal outcome would be to stay there after a bump up in compensation—but it’s important to know whether you’re willing to accept the other offer or not. And if you are willing to walk away, you should have a sense of your walk away number (i.e. the minimum outcome you’d be happy to stay at your current company with). 

Before diving into any negotiations, take stock of your situation and have a clear answer to the above questions in your head, as this can determine your approach as well as how hard you push for what you want.

Only use credible offers

In order to be effective, you need your employer to see the other offer as a credible one. This might include factors such as how good of a reputation the other company has, the title or level you’ve been offered, and the potential for growth (both of the company and from a personal career perspective). 

Remember that credibility isn’t just about compensation: If it’s obvious that the offer you’re using as leverage isn’t a job you’d be excited about, there’s a good chance your manager will see through it and be less willing to negotiate. Worst case: they’ll bid you farewell and best of luck if they feel you’ve approached the situation in an insincere way.

As a general rule of thumb, only use offers which you would truly consider accepting: Even if you’re not actually planning to accept another offer, using this as a benchmark can help to ensure you’re only negotiating with credible evidence. 

Understand and mitigate the risks

There’s no way around it: When you use another offer as negotiating leverage, you’re going to have to let one company down—which puts your relationship with their team at risk. So it’s important to be prepared to handle this tough conversation as elegantly as possible. 

If you’re turning down the other company’s offer, there are some general best practices such as being timely and transparent which still apply here. You never know who you may end up working for in the future, so it’s worth putting in the effort not to burn bridges with the other team. 

There’s also a chance that your manager will get defensive in response to this negotiating tactic, which creates a risk of upsetting the relationship you have with them—a particularly concerning risk if you’d like to stay. If you do think this will be an issue, consider subtler negotiating tactics, such as mentioning you’ve been getting a lot of calls from recruiters, or surfacing some market comparisons for compensation at your level. 

Demonstrate your commitment

Approaching your manager with another job offer shows that you’ve been looking around—whether or not you actually intend to leave—and you don’t want their perception to be that you have one foot out the door. 

Instead, make it clear that you’re committed to the company with both your words and actions. Explain that you want to stay, but likewise want to feel you’re fairly compensated for the value you bring to the team. Approach it as a problem which you and your manager can solve together, rather than making them feel backed into a corner. At the same time, be sure not to check out of your day-to-day responsibilities, as this could make it appear you’re not committed to staying.

Lastly, align your ask with what’s in the company and team’s best interest. If you truly feel you’re being paid below market, the company might need to re-evaluation their compensation policies—as failing to do so could result in the loss of key talent. If you think your team is under-valued within the organization, perhaps you can work with your manager to increase the visibility of your collective work, and to be rewarded appropriately. The more you demonstrate that your case also takes the greater good of the company/team into account, the more invested you’ll appear—and the more they’ll want to hang on to you.

About the Author

Napala Pratini

Napala is a consultant to early-stage technology companies. Prior to going independent, Napala led marketing initiatives across both consumer and B2B fintech for employers including NerdWallet and Earnest. In past lives she was a ballet dancer and a cancer researcher.