A competing offer is the single most powerful lever available to you in a salary negotiation. Not market data. Not a strong performance review. Not two years of loyalty. A real offer from a real company at a real number. It removes opinion from the conversation and replaces it with market evidence that's very difficult for an employer to ignore.
But using a competing offer badly — or using one you're not prepared to act on — can destroy trust and leave you in a worse position than before. This guide covers how to get to a competing offer, how to present it, how to handle every likely response, and the mistakes that undermine the approach.
Why a competing offer works so well
Internal salary conversations often get stuck on opinion. Your manager thinks you're paid reasonably. You think you're underpaid. Both of you have access to imperfect information, and neither position is objectively verifiable in the room.
A competing offer changes this entirely. It's not your opinion of your market value — it's a third party's actual offer. That's as close to an objective market signal as a salary negotiation gets. Your employer now has to decide whether they're willing to let a competitor employ you at that price.
The psychology also shifts. Without a competing offer, your employer knows you're here, you're comfortable (or at least not actively looking), and the cost of doing nothing for them is low. With a competing offer, the cost of doing nothing is losing you — a concrete cost they can calculate.
Step 1: Know your market rate before you go to market
Before you start interviewing, benchmark your current salary against the market. Use our free salary checker — enter your role, location, and years of experience to see your percentile. If you're significantly below the median, you're almost certainly going to receive offers materially above where you currently are. If you're at or above median, the offer you receive may not be dramatically higher — and knowing this sets your expectations correctly.
This matters for two reasons: (1) it tells you whether going to market is likely to produce a meaningfully higher offer, and (2) it gives you context for how to use the offer once you have it. An offer that's 10% above your current salary means something different than one that's 25% above.
Step 2: Only start this process if you'd genuinely consider taking the offer
This is the most important rule. A competing offer only works as a negotiating tool if it's real — and if you're genuinely prepared to accept it. Using a fabricated offer is dishonest and will come out. Using a real offer that you're absolutely certain you wouldn't accept, as a pure bluff, puts you in a position where your employer might call it.
The right mindset going into this process: you're testing the external market genuinely. You'll evaluate the offer you receive on its merits. If your current employer matches or exceeds it, you'll stay. If they don't, you'll seriously consider moving. Anything short of that genuine openness to leaving weakens the leverage.
Step 3: Run a proper interview process
Don't approach a single company and rush for an offer. Run a proper process: two or three companies you'd genuinely consider working for, at roles that represent a real step up or lateral move at a higher salary. This gives you options — both in terms of the offer itself, and in terms of the alternative if your current employer doesn't match.
Going through a full interview process, even if you don't end up using the offer, also forces you to articulate your value proposition clearly. That practice transfers directly to the internal conversation.
Step 4: Evaluate the offer properly
Before using the offer in a negotiation, make sure you understand its full value — not just the headline base salary. Check:
- Base salary vs. total compensation. What's the bonus structure? What's the equity grant, vesting schedule, and current valuation? A £90,000 base with meaningful equity may be worth more or less than a £95,000 base with no equity, depending on the company.
- Benefits. Pension contribution rates, health insurance, holiday entitlement, and parental leave all have real value. Factor them into the comparison.
- Role and career trajectory. A higher salary at a company where growth is limited may be worse in total-return terms than a slightly lower offer at a company where you'd progress faster.
Know the true value of the offer before you bring it to your employer. If you're going to present it as the anchor for a negotiation, you need to be able to defend every aspect of it.
Step 5: Have the conversation correctly
Don't send the competing offer in a Slack message. Don't bring it up at the end of a one-to-one. Request a dedicated conversation with your manager — they need to be able to respond properly, which means having time to think and, if needed, consult with HR or finance.
The script that works:
"I want to be straightforward with you because I value this role and I respect the relationship. I've been going through an external process and I've received an offer from [Company type, not necessarily name] at [£X]. Before I make any decision, I wanted to have this conversation first — I'd genuinely prefer to stay, and I'd like to understand if there's a path to [your target number] here."
Note what this script does: it's honest (you have a real offer), direct (you state the number), and clear about your preference (you'd rather stay). It doesn't threaten, it doesn't apologise, and it doesn't invite a long negotiation about whether you deserve more. It creates a clear decision point.
Then stop talking. You've said what needs to be said. Let them respond.
Handling the responses
If they match or exceed the offer: Confirm in writing before signing anything. "To confirm, we're agreeing to £X as the base salary, effective [date]. I'll look out for the updated offer letter." Don't just accept verbal agreement — get it documented. Then: consider seriously whether you actually want to stay. If they can find the money now, the pattern of having to go to market to get market rate is relevant information about the culture.
If they come back below your target but above current: You've made progress. Decide whether to push once more or accept. You can push once: "I appreciate you moving on this — is there any way to get to [target]?" Don't push more than twice on the same number. After two rounds, you've extracted what's available.
If they say they can't match it: Now you have clarity. Either they genuinely can't afford you at market rate, or they've decided you're not worth it to them at that price. In either case, you know the answer. Evaluate the competing offer on its own merits — without the current employer's response as a factor.
If they seem defensive or irritated: Some managers interpret a competing offer conversation as disloyalty rather than a legitimate market signal. Reassure them of your genuine preference to stay and keep the tone warm. If the response is disproportionately hostile, that tells you something important about the culture.
What not to do
Don't fabricate or exaggerate the offer. It's dishonest, it will come out, and it destroys the most important part of the leverage — the fact that it's real.
Don't use this as a recurring tactic. A competing offer works once every few years at a given employer. Using it repeatedly trains your employer to ignore it — or to conclude that you're perpetually looking to leave.
Don't let the conversation drag. Once you've disclosed the offer, push for a decision within a week. Prolonged negotiations after a competing offer has been disclosed signal that you're not serious about it.
Don't neglect the relationship. This conversation should feel collaborative, not adversarial. You're giving your employer the opportunity to retain you at market rate. That's a service to them, not a threat.
When to use a competing offer vs. a direct raise request
A direct raise request (without a competing offer) is the right first move when you're below market and haven't yet had the conversation. It's lower stakes, lower friction, and often sufficient for gaps under 12–15%.
A competing offer becomes the right tool when: you've had the direct conversation and received an insufficient response, your gap is larger than 15–20% and needs external validation to close, or you're genuinely open to moving and want to make a real decision rather than just negotiate.
Start with your market rate. Check your salary percentile — that's the foundation of knowing whether a competing offer is likely to produce a materially higher number than you currently earn.