Professor of Organisational Behaviour; Chair, Organisational Behaviour Faculty
Think at London Business School: fresh ideas and opinions from LBS faculty and other experts direct to your inbox
The joy of getting a job offer can be tempered by a sense of disappointment if you fail to negotiate the right offer. So how can you encourage a prospective employer to offer a suitable package without making them think twice about hiring you?
The first thing you need to do is prepare by thinking about the issues you’re going to negotiate. When offered a new job, the first thing people often think about is money, which is just one part of the picture. There are many things that go into a job offer, such as bonuses or a relocation allowance if you’re an expat. Then there are more intangible things such as which team or location you’ll be working in or who you’ll report to. You can’t negotiate who your line manager will be, for example, but it’s an issue that will affect your role.
You need to understand what’s important to you. What’s negotiable and which issues should you prioritise? Would you prefer to be in London making £100,000 or Paris earning €100,000? You also need to figure out your bottom line and alternatives and then gather as much information about the organisation. What are the organisation’s alternatives, who else is being considered and what does the market look like?
Many people will have looked at these factors when being interviewed, but it’s useful to think about them again before the negotiation because your mindset changes. When interviewing, you’re trying to get the job. When negotiating, it’s more about problem solving than selling yourself.
Without preparing, you can be surprised by a question and say something that puts you in a tricky position. For instance, ‘How much do you want?’ or ‘what’s your current salary?’ If you’re not prepared to answer that, you could put out a number that is disadvantageous. You really need to think about this before the interview so you can give a realistic and optimistic answer if asked.
You don’t want to put out a number that encourages someone to stop the interview or negotiation. But you also don’t want to give your current salary, as the incentive for the organisation is to meet that figure or just offer a little more. It’s better to say you’re interested in the job offer and talk about the overall package rather than just the salary.
This concept is founded on the notion of ‘anchoring’: when people make numerical estimates, they typically start off with a number (an anchor) and adjust away from that. But the adjustment is often insufficient. The anchor you put out when discussing salary will have a huge impact on the final outcome, so you want to think carefully about what you can realistically, but optimistically, ask for.
A common mistake people make is to try and negotiate one issue at a time instead of discussing them simultaneously. There’s more give and take and a better chance of reaching an agreement that meets both parties’ needs when talking about salary and holiday allowance together, for instance, rather than separately.
Negotiating is a balance between pushing for what you want and not offending the other side. You need to judge the situation – I’ve seen people push and push, whereas it may be better to say, ‘I appreciate all your help and this job offer is very exciting so I’m going to take it, but if there’s any way you can help me on this final issue I’d really appreciate it’. Sometimes, the company comes through and offers something on that last issue.
The key is knowing when to stop pushing, because doing it too much will damage the relationship. Roleplaying the situation helps. Get somebody who you trust – partners are great, but they’re on your side – such as a colleague or friend who has some knowledge of how the industry or organisation works.
Your greatest source of power is your alternatives. An organisation like Google may have a lot of power because tons of people want to work there, but if you’re a good candidate you will have many strong alternatives. This mitigates the psychological perception that you can’t ask for something, while showing Google that you’re really good and need to be enticed.
There is a series of books about how women don’t ask because they don’t want to come across as aggressive or too assertive as that can backfire. As a result of not asking, they get less and that can compound dramatically over time. This is true for anyone who believes they shouldn’t ask for something because they might offend.
Think about your strengths, have alternatives and ask politely. You then put yourself in a position where you increase your chances of getting something. You just need to make sure you don’t badger the other side to the extent where they don’t want to deal with you anymore.
If you want something, don’t be afraid to ask for it. But you have to ask politely and, better yet, in a way that frames it in the mutual interest of the two parties. If asking for a higher salary, you could say, ‘I have lots of responsibilities and a new family and I need to make sure I can comfortably provide for them. If not, it’s difficult to dedicate my full time and energy to this job.
Framing your request in a way that says, ‘I’m trying to work with you to form a long-term relationship that is beneficial to both parties’ is much better than demanding things. You should see the negotiation as a joint problem-solving exercise with mutual and long-term interests.
You often have to negotiate with HR, because the company wants to carry out a fair process for everyone they hire. This suggests HR may be less willing to flex on things, so it’s useful to try and involve the hiring manager. But you never want to do this in a way that seems sneaky, underhanded or an attempt to bypass HR.
For instance, you may need to speak to your hiring manager to understand the day-to-day process of what the job will look like. Create an opportunity to have that conversation with the hiring manager to see if they can advise you on how to approach HR. Or even have them negotiate on your behalf with HR. It can work out much better than negotiating directly with HR, which is a lot more black and white and if you don’t tick all the boxes, they go to the next candidate.
This sounds obvious, but don’t do anything that may be unethical or involves hardball tactics, such as coming in with an outrageously high first offer or making ultimatums. You don’t want to put yourself in a position that could jeopardise the long-term relationship with the organisation or your reputation.
I have people in my classes who ask, ‘Can I lie about my salary?’ Don’t do that. People have had job offers rescinded or they have been fired after it’s discovered that the information they gave was untrue. Whatever you do, you don’t want to put yourself in a position where the employer finds out the information you gave is untrue.
If you’re going to answer the question, answer it. If you’re going to evade it, make that clear. People know there is some gamesmanship when it comes to negotiating and they know when you’re evading. But if you put out a number that’s incorrect, you’re lying and that can have lots of long-term negative repercussions.
You must be a registered user to add a comment here. If you’ve already registered, please log in. If you haven’t registered yet, please register and log in.Login/Create a Profile