In today’s cutthroat and competitive society, success doesn’t just happen by chance. It takes a lot more than luck to be successful.
Of the many critical traits to success in anything we do is negotiation.
Convincing people to agree to your terms as much as possible is an art because it usually takes a lot of work, especially if we have nothing to bring to the table.
Understanding the negotiation landscape
Reaching a win-win situation in a negotiation for all parties is usually the desired outcome, but that isn’t always the case. There can be circumstances where a negotiation only benefits some parties.
These situations arise when one party holds more leverage against the other by possessing better information or is more skilled in negotiation tactics.
It’s essential to recognize that sometimes compromises may lead to outcomes favouring one party over the other.
Understanding the power dynamics between all parties before a negotiation takes place can help you better prepare for and navigate such negotiations.
Scenario
Imagine this, Stewie, a full-time employee, has been working at his local grocery store for a year. As a produce floor manager, he earns $15.50 an hour, above the market rate. Stewie is now aiming to increase his pay to $20 an hour.
Some might argue that Stewie will not get the pay raise he’s looking for. While it might seem challenging to justify such a significant pay raise given that his current wage is already above the market rate, Stewie has solid justification for his request.
Stewie has been consistently demonstrating his value through his work. He has meticulously tracked his successes, milestones, and even his mistakes, showcasing a commitment to continuous improvement.
This self-awareness and documentation highlight his contributions and growth over the past year. He understands that the local grocery store has a budget for yearly increments.
Moreover, Stewie understands the financial implications for the company if they were to re-hire and train a new employee. The expenses associated with recruitment, onboarding, and training would far exceed the cost of raising his hourly wage.
By highlighting his proven track record, dedication, and the cost-efficiency of retaining a skilled employee, Stewie makes a compelling reason for his desired pay raise.
However, due to budget constraints this particular year, the local grocery store is not looking to give a pay raise anytime soon.
When the store wouldn’t budge on his pay raise, Stewie negotiated for a better benefits package, saving him expenses that the potentially increased pay would have covered.
The local grocery store offered him enhanced benefits, including non-monetary perks and increased flexibility, while maintaining his current hourly pay.
Although Stewie did not receive the pay raise he wanted, he ended up in a better position than before, benefiting from the added perks and improved work-life balance.
This scenario primarily benefited the local grocery store, which retained a valuable manager without significantly increasing its budget.
This situation highlights the importance of knowing the power dynamics and gathering essential information before the negotiation takes place to plan the right timing and get the results we want.
Strategies for effective negotiation
Negotiating like an expert combines experience with knowledge. If you lack experience, you can compensate by being well-prepared with effective tips and strategies for negotiating a pay raise.
Be prepared and know what you want.
We have to be transparent, clear, and concise regarding our goal and the targeted outcome after the negotiation.
If a lack of clarity is present, we can be easily swayed and influenced by other factors that distract us from our goals. When we know what we want, others will understand us better.
Then comes the next part: research and preparation. This is where you gather as much information as possible to influence the negotiation in your favour. In the scenario featuring Stewie, this includes:
Market salary data:
Understanding the market salary for your job position, industry, and geographic location to determine the benchmark and range of competitive pay.
Company’s finance:
Find out the company’s financial status, recent performance, and forecasted growth, helping you gauge the ability and likelihood of a company to grant you your asking raise.
Personal performance and contribution:
Keep a list of all your achievements, successes, milestones, mistakes, failures, and room for growth. Gather feedback from direct managers, and fellow peers with case studies to strengthen your justification for a raise.
Similar roles and responsibilities:
Compare similar roles and responsibilities within your company to ensure you’re asking for fair compensation, at least at the bare minimum.
Internal policies and pay structures:
Learn and read up on your company’s career growth, increment percentages, and timeline for pay raises.
Have a chat with your managers, colleagues, or your human resource department to learn more. Chances are, you’ll hear about someone’s first-hand experiences and may get some tips to make your case compelling.
Professional development and upskilling:
Be really good at a skill, and highlight it.
Consider highlighting any recent qualifications that could validate and emphasize your skillsets. Suggesting an increase in your roles and responsibilities can be an intelligent strategy.
Companies are often more willing to increase your pay if it aligns with taking on additional responsibilities and contributing more to the organization.
Industry & Job trends:
Last but not least, consider trends within your industry. Be aware of trends and changes that have happened that could affect skill shortages or skill influx, salary changes, and increased demand for specific roles.
Being thoroughly prepared and equipped with the above information can significantly increase your confidence and effectiveness in your pay raise request.
Think fast, and be spontaneous
While preparation is crucial, success ultimately depends on your ability to navigate the moment of negotiation effectively. Here are some tips to help you think on your feet and to adapt quickly.
Remain calm and confident:
Even if the conversation takes an unexpected turn, keep your cool. A composed mind helps you ask the right questions, and say the right things at the right time.
Know what you’re worth:
“Don’t bargain yourself down before you get to the table.” – Carol Frohlinger.
It’s important to maintain an atmosphere and leverage power to position yourself as an individual who contributes value and is asking to be compensated commensurate with the impact that your work brings to the company, and not to position yourself as an individual who is increasing overhead expenses.
Listen well:
Understanding the intent of the opposite party can help you empathize with their perspective and respond intelligently.
Ask open-ended-questions:
Ask questions that do not stipulate a yes-or-no response to engage the other person. In addition to giving you helpful information, this can demonstrate your interest in a solution that benefits everyone involved.
Use silence:
Do not be afraid to use pauses strategically. Being quiet can allow you some time to reflect and convince the other person to change their mind or provide further information.
Flexibility:
When you negotiate, be flexible and ready to change your approach as needed. But always recall what your minimal acceptable income is.
As a result of this clarity, you can decide quickly when to compromise and when to remain firm.
Don’t take things personally:
Maintaining neutrality and professionalism throughout negotiations is crucial as they can be stressful.
Regardless of the outcome, you can stay focused on what you want to accomplish and have a constructive conversation if you don’t take things personally.
Ultimately, thorough preparation and the ability to adapt in the moment can help you navigate the negotiation process with confidence and poise.
This balanced approach increases your chances of achieving a successful outcome while maintaining a positive and constructive relationship with your employer.
