The secrets of successful dealmaking so you get every dollar you deserve.
One of the most challenging spots in any negotiation is when you get asked the question: What do you want to get paid? This is a highly uncomfortable position to be in, especially when you recognize that the first rule of negotiation is that the first person who talks loses. The last thing you want to do is to say a number that’s too high, or worse, too low that you get stuck with. So, if you get asked this question, what can you do to help ensure that you don’t leave money on the table?
The good news is that there is an effective strategy for dealing with this.
Do Your Homework
For instance, for a job negotiation, there are volumes of salary information and surveys that employers can use to establish the average market rate for compensation for every job. In most cases, if you show up for an interview, the employer already knows precisely what the job you’re applying for is worth. They know as much information as you do. Similarly, for a consulting practice, you can work to understand what the company typically pays for similar work.
Understand the Company’s Philosophy
Every organization has its philosophy on paying. While many companies may end up paying people on a standard distribution curve–which may be right at the average or median point–others may choose to pay under or even over the median.
For instance, I worked for one company whose strategy was to pay 50 percent below the market average. But they also paid a generous bonus that could push a person’s compensation toward the top of the market. The big difference was whether a bonus was paid that year or not.
Again, the issue is understanding the organization’s compensation strategy.
Once you have done your homework to understand the market rate for your skills and the general philosophy of the organization you are applying to, you’re ready to answer the question if someone asks you what you want to be paid.
You can answer by saying: “I know you know the market in this geography better than I do and that you want to pay fairly to retain your employees. I also understand that you have your organizational philosophy regarding pay, relative to the market rate. So, based on my experience and skills, I am just looking to be paid fairly and appropriately.”
Flinch, Reflect, and Go Silent
The key is not to say any specific number but to let them make the first move. This is where it pays to understand the negotiating strategy to flinch, reflect, and go silent.
I happened to coach a young man who recently implemented this strategy. A recruiter for a new position contacted him. In his current job, he was making $100,000 a year. When the recruiter interviewed him, he used the techniques I outlined above when asked how much he wanted to get paid. At first, the recruiter said the new position paid $150,000. But then this young man flinched, reflected, and then went silent.
Within just a few moments of silence, the recruiter bumped up the offer to $175,000. At that point, he knew that was a fair offer, so he accepted the job.
Bringing Home the Bacon
To ensure you don’t leave any money on the table, start by doing your homework to understand what the market pays for your position and how the company you want to work for typically pays. After that, it’s all about turning the negotiation in your favor by flinching, reflecting, and going silent.
If you can pull that off, you’re well on your way to earning every dollar you deserve.