Recently I attended a company training event. One of the sessions was about Effective Negotiating; we were introduced to some new ideas on Negotiation and also some effective techniques. We were each given a copy of the book Negotiation Genius.
It was one of the best books on Negotiation and Communication, I have ever read. I found myself rather excited about the topic, and I was hungry to learn more. I was hooked- I wanted to learn as much as possible about Negotiation.
I decided to explore deeper – I said to myself “Why stop at one book on the topic? Why don’t I read more?”.
Thanks to Amazon Kindle – it was not difficult to find few more books in the Negotiation category. I ended up reading 5 books in the span of a month (The titles are provided at the end of the article).
My mindset on Negotiation has completely changed. Like most people, I was initially intimidated by the concept of Negotiation. Now I am enthralled by it. Infact, I look forward to more negotiation opportunities.
You might wonder why? Partly because of my Indian heritage. Yes we love to bargain and we love to get a good deal. However, it is not always about the deal. I now have a deeper respect for Negotiation – I no longer feel as stressed or nervous as before.
I will share with you some unique ideas I have learnt from my reading rampage (5 books on Negotiation).
1. Expanding the Pie
This was a mind-blowing concept for me. The pre-conceived idea about negotiation is that there is a limit on what both parties on the table can get; that the the elements of negotiation are definite/fixed; you have to split the pie in such a way that the total is 100% – one person gets 60% and other 40%, or 70-30 split,etc.
The “Expanding the Pie” concept completely changes your mindset. Instead of being stuck in a dilemna of having to divide the pie into fixed amounts, think about what else could be included in the discussion. Expand the discussion. It is not about 100%.
Let’s take an example of a typical Salary Negotiation. You are a candidate who has just successfully gone through the interview process and you have nailed all of steps. The company wants you and they want you now. They come to you with an offer (Dollar amount) and then ask you for your decision.
This is one of the most stressful part of a Job Hunting process. The Salary Negotiation. Candidates are afraid that their request for a higher starting salary might cause the employer to reconsider the offer. So, the candidate either accepts it or they counter with a higher salary.
If you counter with an offer, chances are the employer can sometimes come back to you and say ” Sorry this is the best we can do, everyone starts at the same salary”. Most Salary Negotiations stay stuck in the Dollar Amount.
However, if you shift your attitude towards “Expanding the Pie”– then you can navigate the situation more constructively. Instead of focusing on just the salary – you ask them about benefits, vacation time, relocation fees,etc.
Trust me – everything is negotiable. Some candidates even ask for a signing bonus and they receive it (I have done it myself in the past). Most employers will comply with your requests. They have spent resources- money and time in going through the Interview process. If you are a good candidate – they will not want to lose you. So they will comply.
In the traditional Negotiation situation – there is a sense of hostility, nervousness, tension,etc. When you expand the pie- it does take some pressure off – you are both able to eventually reach a favourable decision. You are able to negotiate things that you would not have thought of.
There are multiple things you can ask for. Ask and you shall receive!!
2. Focus on Interests not Positions
Most negotiation (work, business, family) are centered around the parties’s positions, in other words their egos & feelings. Both parties want to win, sometimes at the others expense. Sometimes, we just want to win the deal for the sake of winning.
This dynamics is also common in the Job Hunting Process- in the case of Employers and Candidates this is evident; Employers sometimes have an attitude that they owe the candidate everything – they are paying the candidate money, they will be training him/her and also teaching them skills – so they think they need to have the upper hand. This is very common. In many cases, this hampers the chances of finding the most suitable person for the job.
Focusing on Interests means choosing to focus on each other’s interests. The Candidate wants a job that pays him/her well and also provides him an opportunity to make a meaningful contribution, thus advancing his career. The Employer wants someone who needs someone who is independent, has a strong work ethic and can get the work done (having key members on the team is critical for the survival & success of the company).
Once each side decides what each other’s interests are, then the negotiation process become easier. The conversation can be shifted towards talking about interests. For example, a hiring manager has indicated that he wants to hire someone who will require very little ramp-up , since the hiring manager does not have the time or resources. If the candidate can understand this, and prove to the hiring manager that he is a quick learner, and has the relevant experience , he can present a strong case on why he is the best fit. The Hiring Manager will now have the confidence to present an offer to this candidate. The candidate’s interest in working for the company maybe because of what the organization represents.
Now both knows each other’s interests & motives – this makes it easier to cement the decision. Then the negotiation process can go smoothly.
Always try to find out the underlying reason for any decision.
If you are a candidate- ask the employer why they are hiring.
- Why is there a vacancy?
- Was someone fired?
- Or the company is growing and they can’t keep up with the growth?
- Or did the last person quit because of the demeaning boss or a stressful culture?
If you are an employer – ask the candidate why they want a job at your company.
- Why are you leaving your current job?
- What is your motivation?
- What do you like about the opportunity?
- When are you available to start
The more information both parties have on each other’s interests- the better chances of reaching a mutually favourable decision.
3. Ask for more than you can expect to get
Most of the time, we walk into negotiations with doubts. I agree it is stressful. We are either conditioned not to come across as aggressive , or we have self-doubts & confidence issues. This is normal.
I recommend you ASK for MORE. Roger Dawson in his book Secrets of Power Negotiating, calls this bracketing.
Let’s say you are a seller of a property. You know the fair market valus is $500000, however you list the home for $550000. A buyer on the other hand, (if he has a sense of fair market value) usually puts an offer in for $450000. The seller counter-offers, and the process continues until they reach a favourable agreement. They both reach the middle that is $500000.
The above example seems pretty simple – however this is how most negotiations work.
Apply the same principle to your Job Hunting.
The most important thing is to have confidence in your skills,experience & abilities. If you believe you are the best fit (this is pararmount) – then go in with an aggressive salary request.
For example, you have done your homework and have learnt that the fair market salary for your Role is $50000. You are confident that you are more than qualified to do the job; you believe that you are the best candidate they can ever find. If the employer has offered you $50000, you should ask for a higher number (eg. $60000). We know very well, any company will not offer you a 20% ($10000) boost, but they will definitely provide more than the initial offer. Let’s say you even received a $2500 increases – you have gained a 5% raise just by asking.
It sounds very simple – but it takes courage and confidence to do this. I recommend you practice your pitch before you head into the negotiation. In my experience, most employers are reasonable, and they expect you to negotiate. Every hiring manager is expecting that the best candidate will request more. So don’t worry about offending them (they won’t be)
4. The Best Return of Investment you will ever receive is by Negotiating
In most cases, the best return of time investment you will ever receive is by Negotiation.
Let’s go back to the Salary Negotiation Example above.
You know the fair market value for your role is $50000. You are happy about the company, their benefits package and additional perks (they have a ping-pong table in the office). Let’s say you accept that offer at $50000 – you have to wait for your next annual performance review for a raise. The conventional salary increases are at 3% – this means in Year 2 your salary will be $51500. You have spent an year to earn an additional $1500.
Let’s make this fun – 365 days equals 8760 hours ; which equals 525600 minutes in a year. So for 525600 minutes of work you have earned an additional $1500.
Now ,let’s say you decided to negotiate the salary upfront and ask for me. You are able to win an additional $2500 in starting salary, and all you spent during the negotiation was a total of 10 minutes . So, for 10 minutes you earned an additional $2500.
Do the math… You can spend an entire year trying to scrimp & budget to save an additional $2500, or you can earn that just by asking.
5. Go to the Balcony
I learnt this concept from William Ury’s Getting Past No. The author urges not to react in situations wherein we are required to react and make a quick decision. Our emotions often gets in our way -as a result we do not make the most rational decision.
The person who is the most calmest in a negotiation situation always gains an upper hand.
It is an unfortunate thing that many negotiators will use gambits, tricks to gain an advantage. This is just a fact. No point in fighting this-just accept it.
Going to the Balcony is a metaphor. It means, whenever you feel under pressure or feel cornered, take a moment to step outside (physically or mentally).Take a deep breath.
Take your ego out of the negotiation process.
What is your end goal? Is it to protect your ego or reaching a favorable outcome?
One effective way to Go the Balcony is to not make a decision on the spot. Take some time away from the negotiation situation – take a break, step outside, sleep on it and come back with a better perspective.
Avoid making decisions under pressure. There is a high likelihood that you will not be happy with the decision. The more time you take when making a decision, the better decision you will make.
As a Sales Professional, I hate it when prospects delay the decision making process. Honestly, I want them to make a decision promptly so I can make a sale & reach my quota. But sometimes, I have learnt that giving them some space to make the right decision turns out to be a positive thing. There is a big difference in just making a sale vs building a strong relationship.
The same applies to your Salary Negotiation. If you are under pressure, request permission to take a moment. Then go back to them with your request.
One effective strategy that I have used is the following.
Usually the HR representative will call you and tell you that they want to extend an offer. They will state a number that they think is fair for you.
You are excited but you are also afraid that you might get a low-ball offer.There is a level of adrenaline rush mixed with nervous tension at this point. I recommend that you reconnect at a later time to have a lengthier discussion. Ask their permission to schedule a phone call at another time to talk more. During that break time, you are able to gain a better perspective. You can then go back calm and relaxed with your counter-offer.
5.5 Get Educated
I have mentioned before, that everyone wants to get the best possible deal. The idea of deal-making has been drilled down into our psyche. And everyone knows about techniques such as low-balling, bracketing,etc. There are about 50+ Negotiation Techniques out there employed by more experienced negotiators.
It is your responsibility to be better equipped in the negotiation situation. Don’t blame the other party for the use of tactics & gambits
Negotiation is a part of life, it is a part of the process- sales, property sale, business negotiations, salary negotiations, etc.
We are always negotiating in our lives. So learn about Negotiating. There are tons of resources – books, courses,videos,etc.
(See below the 5 Books that will be a good starting point for you to learn about Negotiation).
Remember, the best return on investment you will ever get is by Negotiating. Period….
It is important for you to learn to Negotiate. It is a paramount career & life skill. The more you value the skill, the more opportunities you negotiate- the more money you will add to your bottomline.
I want to hear your Negotiation Success Stories.