The number one objective of most people attending my negotiating seminars is how to negotiate a better salary. Although I tell people that price and salary shouldn’t be your only focus I was reminded of the first salary I ever negotiated. It went something like this.
After asking for $25,000 the company countered with $18,000. I then asked for $20,000, to which they agreed. After six months on the job I commented to my boss on how much I enjoyed my job that I would have settled for $18,000. My boss said “I’ll let you in on a secret, we would have paid you the $25,000 you were first asking for!” Sometimes we think we get more than we anticipated but most of the time we usually leave a lot on the table.
A critical factor in successful negotiations is planning. Besides failing to establish rapport, the lack of planning is the next biggest cause of not maximizing your negotiating position.
Planning involves the establishment of your settlement range and also estimating the settlement range of the other side. A settlement range is the minimum and maximum that you are willing to go to reach an agreement. You must decide your settlement range before any negotiation takes place. This is important for two reasons: to help you from making concessions you might not have wanted to make, and to reach mutual satisfaction (you want the other party to feel good about the deal too!) Planning also involves identifying other negotiating issues or objectives that will be part of your negotiating strategy.
Steps Towards Planning your Negotiating Strategy
1. Obtain the information you need in order to establish targets and objectives. Do your homework. Be sure you can justify your rationale for each objective target to the other side
2. Set high targets, allowing plenty of room to make concessions.
3. Base your negotiating strategy on strength. What are some of the key areas you can identify that creates leverage for your bargaining position?
4. Base your negotiating strategy also on your weaknesses. Whatever negotiating strategy you design, it must also be based on your weaknesses. It’s better for you to acknowledge what these are than to have the other side tell you.
5. Get input from others who have negotiated a similar deal.
6. Practice! This needs no explanation.
7. Develop a “term sheet” for your negotiations. Developing a “term sheet” helps you focus on key issues that you may overlook during the negotiation process.
Most people compare salary negotiations to a tennis match. One side lobs a figure over the net and the other side lobs another figure over the net. This comparison is not a very good one because in tennis there’s a winner and loser. In negotiations, especially a salary negotiation, the primary goal is to reach a win-win agreement. The goal is mutual satisfaction. This is what makes for a successful negotiation.
By taking the time to plan your next negotiation you’ll make this a reality!
About the Author:
Gabriel Najera is the president & founder of the Najera Consulting Group. Gabriel is a frequent speaker to organizations. And, is a highly sought after advisor to corporate and nonprofit executives looking to develop a strategic thinking mindset.
Gabriel is the author of the forthcoming book, Lessons From the Field: From Farmworker to Fortune 500 Consultant. Gabriel is available to speak to your organization. To inquire about scheduling Gabriel for an upcoming speaking engagement or to inquire about our consulting services, please click on this link.
I think that this is one of the hardest things to learn! Most people always get short changed, thinking that by asking for too much, it will cause strife. On the other hand, some people don’t even know what they are worth so they don’t know what to ask for. Finding an amount that suits what you, what your duties are, and how much the other side is willing to settle for is a fine line. But I agree that it can be a win-win for both sides and there definitely isn’t a winner or a loser in salary negotiations.
I also find it is important to really write out your negotiation statements and as you suggest practice giving them. Then listen to what you are saying: have you convinced yourself? If you haven’t, you need to work on your statements some more. If you can’t convince yourself, you won’t convince anyone else.
I especially agree with the concept of setting an acceptable range. AND be aggressive. I actually lost out because I suggested a rate that was well below what the company expected to pay…I believe that made them doubt my qualifications.
Having recently started the process of finding a new job, I can really identify! I really, really hate the interview game of “What kind of salary are you looking for?” Everybody knows that the first one to talk loses. I answer with something like “I’m sure we can work that out if there is a good fit.” I have also turned the question back on them with “What is the range you’re offering?” I try to do my homework. I generally know what people in my position are making, but… So does body out there have any magical suggestions? I like the suggestions about strengths and weaknesses listed above, but are there more?