It’s no wonder that many people don’t like negotiating, or aren’t very good at it. Every negotiation involves a bit of risk.
As with any other adventure, the more prepared you are before you start the more likely that you will succeed.
What You Really Want and What You Are Willing to Lose
Before you start any conversations, you need to make a self-assessment. Determine your risk profile. Understand what you are willing to lose.
Remember that when it comes to negotiations, almost anything is up for discussion, including your title, salary, commissions, vacation days, timing of performance reviews, working at home, relocation package, and travel reimbursement. Examine each of these individually and understand what they mean to you. Rank them in order of the most to the least important (“must have,” “very nice to have,” and “nice to have”).
Whether getting a new job or a promotion, keep in mind that your salary is the most important factor to negotiate, as it sets the baseline for all other benefits. Determine you salary range first, and then what you want and need among the other benefits.
Last but not least in your preparations, formulate your “ask” and match it to your risk profile.
8 Tips to Up Your Negotiating Power
- Negotiating with a prospective employer begins long before you are sitting down to hash out an offer. You start negotiating, in fact, from your first contact with a hiring manager or potential boss, says Staci Collins, an Ivy Exec resume writer and career coach. The impression you make can have a major impact on how successfully you can negotiate a job offer. Be sure to present yourself as professionally and powerfully as you can from the first email or cover letter to lay the groundwork for a higher compensation package down the road.
- When applying to jobs online or completing applications, try to write “Negotiable” or “TBD,” when asked for your desired salary. This is increasingly hard to do, as many online applications require a number. And some hiring managers will dismiss applications without a number. So understand the risk you are taking if you don’t enter a number and decide how you feel about that with each application. If you do enter a number, be sure it is a salary you would accept.
- The rule of thumb with negotiations is that the person who mentions a number first loses. That first numbers sets the bar for the entire negotiation. Because of something called the “anchoring effect,” people tend to fixate on a single value or number and then compare that to a limited range. Once a number is out there, you will have a limited range within to negotiate
- A second rule of negotiation is that the person who replicates the first mover’s strategy tends to win. Before you start formally negotiating, think about the big picture: how long you are willing to wait until you get your desired compensation, how long you are willing to wait for another offer from another company.
- Remember you don’t want to be the first to offer a number, and when asked what salary you want to earn, gently suggest
that they know the amount budgeted for the job. If that fails, don’t push too hard. Provide your targeted range. Be sure the lowest number is as low as you are willing to accept for the job. If you accept a lower amount than you initially named, you will lose much of your negotiation power in terms of total compensation package, benefits and perks.
- Pay attention to timing. If you agree on a salary quickly, for example, before bringing up other aspects of compensation that you want you are less likely to be successful getting what you want overall. Take it one step at a time, going through your list of what you want in your compensation package, being aware before each discussion of what you are willing to lose and what you are willing to trade.
- Try to link your argument to a higher argument, that is, something that is not solely about you, Collins suggests. Aligning something you want with something that will benefit the entire team or company can be very effective. Show that you understand what you will need to succeed in your role (something the person hiring you wants). Assess the manager’s role—what is needed for success—and the culture of the organization to offer the best win-win options during negotiations. This is especially important if you are negotiating something other than the typical package. “Make sure it jibes with their values and “way we do things here,” says Collins. For instance, one of Collins’ clients successfully won a Director title rather than Senior Manager by pointing out that the higher-level title would send a signal to the team and to clients that the initiative was important and also provide more of the leverage needed to make the role successful.
- End the discussion by agreeing on how long you have to consider it before you accept. If you are interviewing with other companies, let them know about your offer and how long you have before you make a decision. If you are still interested in another job or company, go through the entire risk profile exercise again using your current offer as a guide. If you are holding out waiting for another offer, you should be honest about it. Carefully assess the risk and reward at this point, as you might alienate the people you are negotiating with if you push too far.