Know your goals
It’s understandable that executives sometimes lose their objectivity when it comes to negotiating their own salaries. After all, a career move is a major life event. So it’s important to be honest with yourself about how well this move is aligned with your other goals, both personal and professional.
You should have already done your own due diligence to confirm that the company is the right cultural fit for you. You should be equally clear about what you expect to gain from this role and what it could lead to.
“It’s incumbent on candidates to make sure they understand all the implications that a career move entails”. Data shows that, during their careers, executives work for an average of seven to 11 employers. Your next move – and the way you negotiate it – affects subsequent ones.
And if your main reason for leaving is money, then in the long-term this is the wrong reason. “Experience has shown that people who move for money alone rarely stay for long.”
By thinking about your priorities – both short and long term, – you will enter into negotiations with a clear sense of what’s most and what’s least important to you. This gives you an understanding of the potential “flex points” – where concessions could be made on either side without endangering a deal.
Mapping your flex points will mean entering negotiations with a clear understanding of acceptable parameters, but keep this in perspective. However satisfying it may be to map every move and counter move, it’s important not to over-think the process. Negotiation is the means to achieving the role you want, rather than an end in itself.
Be as objective as possible
Boyden consultants advise candidates to be as open and honest they can be, right from the start of negotiations. Nothing irritates a recruiter more than trying to hit a moving target, so on no account should you try to improve terms in stages by going back with new demands.
Candid is not the same as brazen, however and this is where candidates make their most common mistake – asking for too much money.
To be fair, this is partly because candidates never have access to the same breadth of information on pay trends as search consultants. Even so, it is still worthwhile doing your research. Talk to your peers and scan the recruitment sections and industry surveys.
This is particularly important if trading is tough in your sector and current packages are much less generous than the last time you moved. “Do your research and find out as far as you’re able, how much people in similar roles are paid”. This information helps you retain some objectivity, something which can be difficult for even the most experienced executives.
Don’t let ego cloud your judgment. Of course it’s flattering to be approached in the first place and real talent is always in demand. But just because a recruiter has sought you out doesn’t necessarily mean you can name your price.
Another reason why candidates sometimes ask for too much is insecurity in the market. In the current climate people would rather reward the loyalty of an existing employer than risk becoming “last in, first out” elsewhere. They therefore seek additional compensation for giving up something known.
Understand the consultant’s role
Even if negotiations about money are handled by a search consultant, it’s important to keep in mind the potential employer across the table. This can help keep your demands realistic. “Never ask for anything via a head-hunter which you wouldn’t ask for yourself were you sitting face-to-face with your potential employer”.
The fact that you don’t negotiate with the consultant but through them is important.
Strictly speaking, consultants don’t negotiate with candidates. Their responsibility is to mediate between the two parties and, ultimately, they are paid to complete the deal. “We’re out to get the right person for the job at the best price for our client”.
Clients vary in their use of search consultants. Some prefer to negotiate directly with candidates while others retain the consultant as the intermediary. The benefit of negotiating via the consultant, is that it helps both parties retain their objectivity during what can be a highly charged process.
Part of the service consultants provide is advising their clients on market norms – any comments they have on offers are reserved for their clients. Consultants can also help ensure both parties are on thinking alike. Some Consultants usually have a conversation with both sides about expectations prior to presentation of an actual offer, to avoid potential obstacles down the line.
Except in certain sectors like the entertainment industry, it is recommended against automatically enlisting a lawyer for your negotiations. Unless it is standard for your industry, involving a lawyer can send the wrong signal to clients and hinder negotiations.
However, lawyers can help when wording is loose – for example if “guarantees” being offered aren’t quite as unconditional as the term suggests. If you are being recruited as part of a team or discussing a significant compensation package, you are probably going to need lawyers. Be prepared to manage them closely. “You need to feel confident that you are aware of proceedings on an hour-by-hour basis”.
Look after your reputation at all costs
Your professional credibility is a very precious asset that can easily be bruised or damaged by poorly handled negotiations. Remember that whoever is involved and whatever happens, it’s unlikely that this negotiation will be your last.
One particularly dangerous situation occurs when you are negotiating with two prospective employers. While this can be done, it needs to be handled sensitively.
Examples from the financial sector where people have done great harm to their reputations. In one case a candidate was running parallel negotiations, talking to one prospective employer while secretly encouraging two other banks to outbid each other. Such behavior is positively reckless in a close-knit market like London’s financial community.
If you are talking to more than one prospective employer, consultants advise being upfront about it and as open and genuine as possible. Try at all cost to avoid giving the impression that you are playing one party off against the other. “It’s okay to have two offers at the same time, what’s not okay is to juice either of them to the detriment of the other.”
An equally dangerous – and more common – situation is when you receive a counter-offer from your present employer. This should never be something you have engineered – indeed it can be the first sign that recruitment is not going smoothly.
But it does happen. The best way to protect your position is to frame your resignation to your current employer as a new career opportunity – which it should be – rather than financial reward. If asked you should explain that what you’ve been offered is, if anything, a little low. This way, you can still salvage your professional credibility if your current firm turns you around with a spectacular bid.
Keeping your reputation intact is crucial. No negotiation can be seen as successful if, at the end of the day, your reputation has suffered. If the move is right for you, give a little.
Understand your goals – be clear on what you want from the role and where you’re prepared to bend a little to achieve the desired result.
Be as objective and realistic as possible – research the market norms for your role and don’t let ego cloud your judgment.
Understand the consultant’s role – ultimately they are paid to get the deal done. Never demand anything of a consultant that you wouldn’t ask a recruiter direct.
Understand where lawyers can and can’t add value – in most cases you ought to be able to reach agreement without them.
Look after your reputation – be as open and honest as possible, especially when you have more than one offer on the table