Below is the transcript of a Q&A for a session I led on negotiation. The full video is at the bottom, and on my YouTube Channel.
Question: In a negotiation, should we start with asking for more than what we actually hope for, since what we ask for will most likely be discounted?
This is a great question because yes, it is true that often times you go back and forth in a negotiation. And if you’re asking for more, the other side may very well try to talk you down.
That doesn’t mean however, that you should ask for so much more assuming that they’re going to talk you down by a lot. You have to still stay realistic regarding what you’re asking for, and really tie it to something that makes sense. You can’t, for example, target a $100,000 salary and start negotiating by asking for $1,000,000 thinking that this gives me a lot of room to go down.
I’m using a very, very extreme example, but it just is to say that you still have to be thinking about what your ideal salary is, what the market will bear, what makes sense in terms of the specific arguments, evidence, proof that you are showing regarding this salary, or the compensation package as a whole, or whether you’re negotiating for something else entirely, like start date or tuition reimbursement, or the scope of the role.
You still need to be tying it to reality. You need to know what is the $100,000 versus $1,000,000 in this situation, so you still need to do your research. You still need to come up with a range that makes sense, or options that make sense, and not just pick something that’s high or big or aggressive, assuming that the other side is going to talk you down.
They might talk you down, if you overshoot or say something that’s ridiculous, or completely unrelated to the situation at hand. They might just think that you’re not for real, or giving them a hard time, or playing with them, or just don’t really know about the position or the situation.
So you want to pick a number still that makes sense, or propose an idea still that makes sense. Absolutely give yourself some room that if a compromise needs to be made, it can be made. You can get creative also. Maybe your number can be hit using overtime, or perhaps as part of a bonus. This way you’re not changing the number, but you’re changing the terms of how you get paid.
This is what I mean by really, really thinking through what it is that you’re asking for. You’re not just trying to shoot high for the sake of shooting high.
How can you apply negotiation skills not only in your career but life in general?
This is a great question, because we’re negotiating day-to-day. When someone asks you what you feel like having for dinner, that’s not a high stakes negotiation, but it could be a negotiation if you feel like fish and the other person feels like lamb for example, or if you are sparring with your roommate say on who’s turn it is to clean the bathroom or take out the garbage, etc.
So we actually use negotiation skills pretty regularly. You might go to a flea market and ask the vendor if that’s the best price that they have, or if they can give you a break on the price because you frequent that stall week after week, or whatever it is.
So there are many examples actually of when you can use negotiation skills in your life, and that’s actually a good way to practice negotiating for your career. Because you can find these situations where you might want to ask for more, or ask for a different outcome, and just get used to asking for what you want, being creative about different options, and then you can carry that over from life back into business.
How do you know how much negotiation room there is?
This is a great question in the sense that it gets back to your research and your relationship, essentially, with who you’re negotiating with.
For example, let’s say that you’re in a hiring process, and during the interview process you might have met multiple people at some point where they’re starting to talk to you about your interest, maybe in the conversation where they ask you about what compensation you’re thinking about, or what decision factors you’re going to weigh. You can turn the question back on them, to ask them about budget, to ask them to describe what the ideal hire would be, and what that scope of responsibility would look like, and then what that package would look like, just give you all of the details.
You can also do some background research, talking to people who have worked at the company, who might be working at the company still, but might not be involved in this specific hiring process. Or for people you know well, you can ask about just how fairly the company compensates its people – how competitive are they compared to the rest of the market.
You can talk to recruiters, HR people. You can talk to your college career services to see if they have any information on similar companies, companies of a similar size, in a similar industry, or perhaps looking at similar roles.
These are ways that you can start to look at what would be the compensation, and are there any reasons for me to believe that this company can pay more, or would pay more, or can only pay less, and would pay less. You are trying to do both your research, but also talking to people.
The reality is that how can you know? You can’t know for sure. You just have to keep the conversation open, and be willing to ask for what you want, and what you deserve, and make it a dialogue, so that they can propose back to you what their budget is, or what their constraints are, and you can really make this a shared conversation, and a shared problem to solve. If they’re really interested in you, hopefully they will do that.
What is the best way to negotiate, when the person you are talking to doesn’t have any power over your compensation package, and doesn’t want you to talk to the decision maker, or won’t disclose who it is?
This is a really good question, because this can happen frequently. Let’s say that you are going to work for the marketing department, and the person that you’re negotiating with is actually in HR, so clearly they’re not even in the same department, and yet they’re handling the offer, and so they’re going to handle the negotiation.
It is a roadblock that you can’t talk directly or appeal directly to the person who’s going to be making the decision. Even if you do get to the marketing department, let’s say that you’re talking directly to the person that you’ll be working with, they may not own the salary budget for their department. They might have to go to their boss, or their bosses boss, or to a salary committee.
You can’t know exactly what the process is, even if the person you’re negotiating with tells you what the process is. They might be bluffing a little bit in order to deflect what might be out of their power, and say, “Oh, I have to ask somebody else”. Maybe they do, maybe they don’t – they might be using it as a stall tactic. So you can’t know 100% for sure.
But what I would say is that this is very similar to any kind of estimation that you’re doing along the way in a negotiation. You can’t know for sure what the company’s budget is. You can’t know for sure what their constraints are on their ability to pay. You can’t know for sure how much they want you in the role. Do they have a number 2 that’s very close, and they’re actually OK if you walk away because they have another candidate in the wings. Or do they have nobody and they would be really, really sunk if you said no and had to start the search all over again.
There are many things that are unclear other than who exactly the decision maker is, and so what you’re trying to do is really treat the person that you’re talking to as the decision maker and and focus on that conversation and making the best negotiation that you can with that person, because if you can convince that person in the arguments that you make, in the way that you approach the negotiation, when you convince them, that will give them ideas on how they might convince other people.
If you find that they are convinced, if you can see that you have them in your corner, you can even ask them: “are we good to go, do you need to talk to anyone else, is there something that I can do or say or provide that would be helpful” in those conversations.
Basically, you’re enrolling that person that you’re negotiating with. Your enrolling them on your side. You’re helping them help you, and that’s a really important thing to do when you’re negotiating with multiple people. You’ve got that person that you’re talking to, and they have other people that they have to convince as well. Keep in mind that the more senior you get, or the more complex your role is where you might be touching a number of different departments, you might have multiple people signing off on your hire, and signing off on your compensation.
So you might have to negotiate really with multiple people in that way. Make sure that for everybody that you convinced, you ask them what would be helpful for them, so that they can make a better case for you.
How can you use negotiation experience from your day-to-day job, say you negotiated partnerships or contracts, for your own salary negotiation?
I love this question, because it’s a great reminder that the skills that you have on the job are not just for your company. You should absolutely use them for yourself.
Think about if you do any kind of negotiating on the job, for example if you’ve hired vendors, or hired consultants. Think through those steps that you take to make sure that you get the best price and the best deal and the best terms for your company.
You probably do research, and you see what other vendors or consultants are charging. You take references, so you really understand what the vendor can do, and you might hear some information about how they price, or what their terms are, or how easy or hard they are to work with, and to negotiate with.
You should be doing those same kinds of things for your salary negotiation. You need to be looking at what are other companies are paying, what is this company paying, are they known for paying competitively, are they known for being tough negotiators. Talk to people who used to work at that company. See what their experience was. See if you can find friendly people that you can talk to who maybe recently joined the company, where the hiring process or the negotiation process is still fresh in their minds. Maybe tap your university or alma mater career services, or tap recruiter or HR friends of yours, and ask for advice – how much do they know this company, or similar companies, in the same industry, of the same size, of the same age.
Just like you would vet a vendor or a consultant that you would hire, a partner that you would bring on, for your day-to-day business, you want to do the same thing for your salary negotiation.
It reminds me of this story of a friend of mine who was in finance, and he was so savvy when it came to investments for other people. When he bought a house for himself, I had asked him if he was going to get a HELOC, which is a home equity line of credit. It’s a very basic investment or financing vehicle and he hadn’t even thought about it. His day-to-day job was with complex financial instruments, and not in real estate. It was just so interesting that here he is making this big purchase, an investment for himself, and hadn’t looked into all of the different options that were available. It’s like the cobbler who has no shoes.
We work hard for our companies, we don’t work as hard on our own careers. We work hard to negotiate, get the best price and deal for our company, but we don’t work as hard to negotiate for our own salary, and for our own deals, and that should change.
So absolutely look back at those day-to-day negotiations you’ve done while you’re on the job, and air mark those steps, and follow those same steps for the negotiation that you do for your next offer.
How do you know when you’re negotiating too much, and starting to annoy the employer?
This is all about the listening. The key step when you’re having a negotiation conversation and this is why I always say, do not negotiate by email. You want to have a back and forth. Phone is better email, video or live is better than phone. You want to have as much contact as you can with the other person.
If you compare phone to email, phone has the virtue of having a back and forth conversation, and you can hear what the person sounds like, you can hear their tone, you can listen for silences or pauses that might emphasize certain words or maybe they’re emphasizing with a change in volume or a change in pace.
Then of course, if you add video or live, you have those nonverbal cues. You can look at their facial expressions. You can look at whether or not they seem like they’re getting anxious, if there gesticulating vary wildly, or maybe they’re rolling their eyes, or maybe they’re looking off into the distance and they’re not engaged and they’re not interested in what you’re saying, maybe they look confused.
The more visual and aural, the more you can listen, the more you can look, that is going to help you. So in terms of gauging whether you’re annoying the employer, you can look for all of those clues.
Also, don’t read into and project your own anxiety on to the employer. Don’t automatically assume that just because you’re asking for, say, a higher salary, you’re asking for more. You’re essentially saying no to something that they asked, to try to get to a yes somewhere else – you are pushing back.
Don’t assume that just because you’re pushing back in that way, that it’s automatically going to annoy or frustrate the employer. If you can negotiate in a respectful manner, highlighting how grateful you are for the offer, and how excited you are to come on board. You want to highlight those points where you are in agreement, and then isolating just very simply and factually where the point of disagreement is.
If I continue the example I just used, so it’s in the salary, and so you’re asking to go from whatever they had offered to something that’s higher than that. If you ask for that in a civil and respectful way, they’re not going to be annoyed. They still might say no, or you still might have a back and forth, but they’re not going to be annoyed.
I have found that employers, recruiters, they respect good negotiators, and in fact, if you negotiate well, it will raise your credibility in the company, and they will be so excited to have you, because they will want you to negotiate as hard for them on their behalf as you are for yourself.
How do you negotiate when you’re in a position of weakness, say you aren’t willing or able to walk away, but you also don’t want to be taken advantage of.
I love how this question really juxtaposes that feeling of, well I don’t really have any leverage here because I want to take this offer, or I have to take this offer because I’m already in transition, and I really need to take this job. You feel like you don’t have leverage, but at the same time, you don’t want to be taken advantage of. You want to be excited about the offer, and you want to feel good about it.
I was once in a negotiation, and I was the recruiter on this one. So I was on the employer side of it. And this candidate did a great great job of getting the salary higher and higher, and in fact, he doubled his salary.
First of all, the reason why he doubled his salary was because he was incredibly underpaid. Part of that was because of the industry he was coming from – he came from a lower paying industry into a higher paying industry. He also went from a lower paying geography to a higher paying geography. So remember, salaries are relative, and so part of that bump was simply just moving into a different market.
This was also a very, very tough search to fill. He knew that he had a special set of skills, and he was able to straddle the engineering side and the business general management side. It was a very attractive background, this was a hard to fill position, so he knew he was in a good position. But he never lorded it over the employer. He always focused on how excited he was about the offer, how grateful he was to get the offer, how excited he was about the position, always polite, always respectful, but he kept coming back to, “I just want us both to feel really good about the position and my understanding of this role is that it pays X”.
And so he always was bringing back his salary demands, not to wanting to assert himself, or to get one over on the employer, but he brought it back to what the role commanded and what made sense for the scope of responsibility that they were asking for, for the level of experience, for the expertise. He got what he asked for, and he was at that company for years and years, and he’s doing very, very well in his career.
You have leverage, even if you’re coming from a lower salary, even if you really want this job, because he really wanted that job. Don’t be afraid to really stay in your position, to ask politely and respectfully, but assertively, for what you want.
Leverage isn’t only the ability to walk away. You might have decided, OK I’m taking this job. Leverage is also though, reminding the employer how valuable your skills and expertise are, because they don’t know for sure that you aren’t willing to walk away. They don’t know for sure that you don’t have another offer potentially lined up, or that you’re close to an offer. They might not know that you have low savings in the in the bank and you’re feeling anxious about money. They don’t know these things.
In the negotiation, both sides don’t know everything about each other, and so you might not think that you have leverage, but the employer doesn’t know that for sure. So you always have some leverage, and you can always push back. If they give you a best and final, and say, look, we just can’t do anything right now, since you were so polite and respectful through the process you can still accept if you decide that that is the best offer for you right now. You can think about negotiating later on, but you haven’t burned any bridges ,because you were nice about it all the way through.
