Negotiation As a Way of Life

posted by Brian Krueger under job search #negotiation #salary #offer #employers

Is negotiation just arm wresling over money?
Is negotiation just arm wresling over money?

I have a friend who now lives in the US, but grew up in another country. In his home country, he negotiated for things he needed on a daily basis. Street vendors. Taxis. Stores. And yes, job offers.

Almost everything was negotiable for him in his life. He was and is a master negotiator. He is my hero when it comes to negotiation.

I had an opportunity to go with my friend to visit his home country during a business trip. Watching him in action negotiating on almost everything was not only entertaining, but highly informative. It changed my world view on negotiating. Not just for other countries, but for the US as well.

Yet for most Americans, we negotiate very little in life. Buying a car may be the one practice in negotiation that most people have. Yet, even then, I had a friend who paid sticker price for a car, not knowing it could be negotiated. Americans typically are poor negotiators because we simply do not do it very often.

So here are some simple rules I learned from my friend when I went with him to visit his home country. And each of these rules relates directly to job search offer negotiation.

Rule #1: Start with the expectation that everything is negotiable.

In the US, we would never dream of negotiating at a store with set prices. Yet in his country, even in stores you could negotiate a better deal, especially if you were buying more than one item. And yes, he has also negotiated in stores here in the US as well. How? By asking them to throw in a lower cost item as part of a bigger purchase. The key is to look at the deal as a whole. Even if specific parts or components of the deal may not be negotiable, other parts may be. So that makes the entire package negotiable.

In job search, candidates often consider the job offer to not be open to negotiation, especially at the entry level. They think: “Well, this is what they offer everyone at the entry level, so I don’t have any ability to negotiate. Why even try?” And, to be clear, there are some employers who do have set amounts they will pay at the entry level. Even then, exceptions are made, and nearly all employers are willing to negotiate on some of the components of the offer. The job offer is not just a dollar amount in salary, there are many other components that go with it as an overall total compensation package.

Rule #2: Know the baseline before you negotiate.

When my friend went into negotiations, whether large or small, he already knew what he was willing to pay. He had a wealth of experience in both standard pricing as well as negotiating. He knew that if an item was priced x that the vendor would start negotiating at y and he could eventually get them to z. This level of knowledge takes a great deal of time to accumulate, yet it was instinctive to him. If I ever wanted to purchase something, I would have him ask for the price first. As a local, he was given a different starting price than I would be given as a foreigner. Why? Because the vendor knew that he had the knowledge of the baseline.

In job search, you need to know the compensation baseline as well. Some baselines are very well established by those who have gone before you. Your best source of this knowledge is other students at your school who have already accepted an offer with that employer. The next best source are recent alums (ideally from last year) who accepted an offer with that employer. Beyond that, research the salary data for specific career categories along with how that salary might be affected by specific geography using the Salary Calculator at our site.

Rule #3: Know the difference between acceptable and unacceptable.

There is a big difference in negotiating for something you must have versus something that you only want if your terms are met. If you start negotiating for something you must have and the person selling knows that, you have little or even no negotiating leverage. Your best hope is to walk away as a bluff, but then you still end up coming back. On the other hand, if you are negotiating for something that you merely want and will only purchase if your terms are met, you have great power in the negotiation. Especially if there are multiple sellers involved. You can simply walk away and go to a different seller. My friend negotiated both for things he had to have as well as things he did not need. And his negotiating approach was different for both.

In job search, your greatest position of negotiating strength is when you have multiple employers making an offer at the same time. Or at least multiple employers interested. On the other hand, if you only have one offer from one employer, you have to ask yourself this question: “If I can change nothing in this offer, will I still accept it?” It may be less than ideal, but if the alternative is unemployment and living in your parents’ basement, it may be acceptable. That doesn’t mean you should not negotiate, but your negotiation approach is very different. You can still make requests, but they should be done so only after accepting the offer. And they should be minimal requests or simple adjustments. Your greatest strength in negotiating an offer will always be when you have multiple offers in play at the same time. Then you can and will walk away from all of the offers except one.

Rule #4: Be willing to walk away.

My friend would walk away if he didn’t get the deal he was looking for. And sometimes he wouldn’t get it with several vendors. We often walked from taxi to taxi before he got the deal he wanted. And they knew he was willing to walk away, since the other taxis lined up saw him go from taxi to taxi. If you are not willing to walk away, you will not get the best deal. Simple negotiating, whether it is with a taxi driver, street vendor, car dealer or employer. And you have to be willing to walk away with no regrets. If you are pained to walk away, you are not truly walking away.

If you have an unacceptable job offer, you need to be willing to walk away. And the employer has to know that you are willing to walk away. Their way of getting you to accept the job offer will be by meeting your minimum terms. And you need to spell it out very specifically: “If you are able to provide x and y, I will accept your offer.” It’s called a counter offer. Be careful, since you are effectively (and legally) declining the original offer in doing so. But if the original offer is truly unacceptable to you, you need to be willing to walk away. That is your position of strength in negotiating.

Rule #5: Always be courteous.

My friend was always kind and courteous to those with whom he was negotiating, even when the negotiating did not work out and he ended up walking away. Vendors are always more willing to work with someone who deals with them in a positive way. And yes, there were several times that he was called back and got his target price. It’s all part of the game and he played it extremely well.

In job search, you need to extend the same professional courtesies to potential employers. Be clear in your requests and be clearer still that you would very much appreciate it if they can accommodate your requests. And the words “accommodate” and “accommodation” are very effective words to use in your negotiations. Managers are trained to meet reasonable accommodation requests in the workplace. If you make a request for a reasonable accommodation, it is much more likely to be granted.

Rule #6: When you are ready to buy, have your cash in hand.

This negotiating technique is somewhat humorous to watch in application. My friend always carried with him plenty of small bills in local currency so that he could have exactly what he was offering in hand when he made his final offer. The sight of the vendor’s eyes looking at the money in his hand was fun to watch. Then my friend would extend his hand to offer the money with the clear implication that the negotiation was over, this is the final offer and yes, I am serious, here is the cash. It was often irresistible to the vendors to simply accept the cash in hand. Up to that point, it was merely verbal negotiations, a lot of back and forth. This was what often sealed the final deal.

In job search, if and when you are ready to accept the offer, say so. For acceptable offer negotiations, first accept the offer, then make any final requests you may have. In unacceptable offer negotiations, state clearly what would make the offer acceptable, then conclude: “If you can accommodate these requests, then I will immediately accept the offer.” This gives the person making the offer the ammunition they need to get any requested changes approved internally. “If we make these changes, s/he will accept the offer immediately.” It’s cash in hand, ready to seal the deal.

No, Americans are not very good at negotiation. The same would generally apply for Canadians, Brits and most other primarily English-speaking nations. We’re not good at it because it’s simply not part of our daily life. However, we can learn from those who negotiate for a living and those who negotiate to live. Be ready, willing and able to negotiate your job offer to get the best possible offer.

We have more information on offer negotiation, including a printable Job Offer Checklist of items you may be able to negotiate in the Job Offer Negotiation section of our site.

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