Negotiation is a skill which is not specific to any industry; we all negotiate on a daily basis. In the corporate world, we frequently find ourselves in scenarios where we need to negotiate for something or the other – be it between job offers or with our boss for pay raise.
In this article, we will learn some tricks and tips to become a smart negotiator.
Not everyone is a born-negotiator, but most people can improve upon their negotiation skills by strengthening and practicing the basics.
In a negotiation, there are usually 2-3 parties involved, who have decided to come on one table with a flexible mindset, to sort out their differences.
A few key principles to note down:
Having a negotiation mindset is very important in negotiation sessions. Realise that the goal of negotiation is to reach a middle ground which is fair for both the parties. It is not a competition between you and the other person, so don’t be hell-bent on extracting all the value from the discussion.
Know where you can compromise on certain things. It will not be considered a successful negotiation session where you are super happy, and the other party is unhappy.
BATNA (Best Alternate To Not Agreeing)
Suppose your demand is not accepted by the other person, and the negotiation falls off. What is the other option you have? This is the essence of BATNA – to have an action plan ready in case of disagreement.
While taking part in negotiations, you must be aware of your alternatives — what to do if the current deal doesn’t execute?
All negotiations have 2 major components – the ASK i.e the thing you are negotiating for (or the demand) and the VALUE i.e the reason for demands.
An example: Suppose you had helped your firm increase their sales over the previous quarter and now want to negotiate for a raise of Rs. 20,000 in your salary. This raise will be your ASK and your help in the sale increase will be the VALUE.
You must be very clear and specific about what you are asking and what value you are bringing to the table that makes you deserving of that ask.
Whether you are negotiating in person, on phone or online, you will be involved in some sort of communication with the other party(or parties). The flow of communication will determine the success of your session – the words you choose, your tone, the questions you ask etc.
Having these basics cleared will help you determine the right kind of strategy for your negotiation meetings.
2. NEGOTIATING A JOB OFFER
How to negotiate when you have multiple job offers? Let’s try to understand this via an example:
Suppose you have two job offers – from
A. a STARTUP, and
B. a big TECH FIRM.
STEP 1: ANALYZE THE JOB OFFERS
Have a clear understanding of what each offer entails. You can do this by doing a little research and preparing a ‘pros and cons’ list of each offer.
For example, Option A might have the perk of a higher salary whereas option B can provide you with a good brand name.
STEP 2: BUILD A NEGOTIATIONS ROADMAP
Be clear about your “VALUE-ASK” – i.e. know exactly what you want from your job offers. List down the key things you want to negotiate on – for instance, responsibilities at your role, salary or other components – and then try to align it with what you’ll get from each position.
Point to note: Don’t be unreasonable in negotiations. If you are already inclined to work with the startup because it is paying you a 10 lakhs salary, don’t go to the big-tech and demand for a 15 lakhs salary – this is not the correct way. The negotiations must be FAIR to BOTH THE PARTIES.
STEP 3: NEGOTIATE WITH YOUR OPTION ‘B’
Try to understand the factors which makes one offer more tempting than the other. Once you have done that, try if the variables can change for your option B. If you are inclined towards working with the startup, go and negotiate with the Big-Tech.
How to do this negotiation?
Reach out to the HR of the firm and politely explain the scenario to them. You may write to them in the following manner:
It was a pleasure speaking with you. I am super excited that I have been offered a job with the
Having said this, I have another job offer in hand…(Explain your Option A job offer)
[Here you must list down the perks and positives of your option A]
While I respect your offer, I was hoping that…(specifically point out your ASK)… so that the offers can become equal in value.
Thank you again for the offer. Looking forward to hearing from you!
Keep in mind: Do not negotiate with the company if you don’t want to accept a job offer. If the firm agrees with your ASK, do join them. DO NOT OVER NEGOTIATE. That is not an ethical way of negotiating and it ends up burning bridges with the people.
3. NEGOTIATING FOR MORE SALARIES
All of us desire more salary from our jobs, but a majority of us don’t take the step to negotiate for the same. We would rather change jobs when we get a better offer, but within our current company, we don’t tend to negotiate for more salaries.
Here is a simple framework you can follow if you want to negotiate for more salaries:
The 3R FRAMEWORK
- RIGHT TIME
The right time has to be seen from two perspectives:-
- From the firm’s point of view: Understand the business cycle of your firm and know when the firm will be more flexible to agree to your pay raise (i.e when the money is flowing in).
- From your performance point of view: If you have recently got good rankings and helped your firm get high rewards on that big project, then it is an apt time for you to leverage these plus points and approach the management. However, on the flipside, if your rankings have been poor off lately, then it might not be the ideal scenario to put forth your demands.
A combination of these 2 perspectives will determine the right time for you to decide for negotiations.
- RIGHT VALUE
Once you have figured out the right time, you must determine the Right Value for your pay raise. Consider this:
Suppose you increased the sales of your firm by 100%. Now that doesn’t mean you should demand a 100% salary raise. The increase in salary must be appropriately proportionate to the value added.
The Right Value depends on the $dollar value you are bringing to the firm. It is easier to assess the value for some quantifiable jobs such as sales, marketing etc., where there are specific targets to be achieved. But, in other verticals, where you are not directly adding to the $dollar value of the firm (such as management consulting), look at your job responsibilities and try to figure out some sort of quantifiable metrics for calculation.
For instance, if you are into the training department, and you trained 100 more employees than last year, that signifies that your performance is going up. You can cite this point as a VALUE to your ASK.
- RIGHT PERSON
Once the right time and value is ascertained, you need to identify the right person, with whom the negotiations must be done. This person must be someone who has some power over deciding salaries of the firm’s employees.
While approaching the right person, do a background research to understand his/her personality. This would help in building rationales to highlight your value addition to the firm.
You must keep in mind that your points of discussion must be aligned to the concerned person’s values. Negotiation strategies vary across cultures. For example, Japanese are all about teams. So it is not sufficient to convince one individual – the whole team has to be won over.
SAMPLE NEGOTIATION PITCH:
While negotiating, you must frame a fair ASK. Determine a minimum satisfactory baseline; you can start off with a slightly higher, but not unreasonable amount.
Consider this: You were responsible for a 100% increase in sales of your firm last year. Now, this is the right time to ask for a pay increase, as you brought in good value to the firm. The increase in salary cannot be 100% but you do deserve at least a 20% raise. The negotiation pitch can be:
Dear Mr. Manager, it was a pleasure working with you. With your help, I was able to make a
To get the best out of the session, be well-versed with your value addition to your company and back your rationales. And remember to be polite in your conversations.
Negotiation is a win-win situation, where both the parties are benefitting. Even if your primary demands are not met, a reasonable party, in a smart negotiation session, will be open to compromise.
If you are well versed with these tips, you will be able to put your stand more firmly. Thus, do not hesitate, and go on to negotiate for what you deserve!