Dec 14 2010
Anything that affects your confidence level negatively in negotiations is going to cost you and that’s just a fact. And while it certainly may be difficult to keep your confidence (and chin) up in an economy that’s this down, there are still always some things working in your favor. I’m going to explain one of them, a technique I call the lockdown maneuver.
I’m assuming you now have an appointment where you will sit down and finalize compensation with your new boss(s). Use the “lockdown” maneuver when you want the option to negotiate up but don’t want to risk what you already have - a firm offer! What if you plan to ask for something seriously out the employer’s range? In an employer’s market, there is some danger that an attempt to negotiate may prompt them to call in the next [cheaper] candidate. The lockdown maneuver helps prevent that.
Here’s how it works. They’ve extended you an offer. You response might sound something like this:
“An offer! Thank you. That’s really great news. Of course there will probably be a few points about the package that we’ll need to iron out and I have a question. Sometimes talking about money can get a little uncomfortable. Tell me, I wouldn’t be putting this offer as it now stands in jeopardy by discussing it with you, would I?”
Or you could say. “Thanks for this offer. I presume this offer is firm, right? I would like to negotiate on a few points and want to make sure that the offer, as is, is firm.”
This “lock down” move gives away a little negotiating leverage, but that’s the price of safety. It doesn’t guarantee they won’t talk to an interloper, but it has the strength of a handshake if they agree.
Now it’s time to shoot for the moon. Let them know your ideal compensation – ideal means the absolutely biggest package you could possibly imagine getting. Tell them the number, or range, and, most importantly, share as many indicators as possible that validate that amount. Use salary surveys, other offers you’re entertaining or applying for, projected earnings or savings you’ll create on the job, past earnings, recruiters’ estimates, and anything else you can think of to corroborate your number.
You can use a softening statement if you wish. “Mr. Employer, I’d like to tell you my absolutely ideal compensation; that would make me ecstatic; it’s probably out of your range, but I thought it would be valuable to share it.”
Imagine their offer of $150,000; you want $200,000. Traditional negotiations would ask for $200,000 and settle for something in between, like $175,000.
Instead, if you “lock down” the $150K, then you can share an ideal comp plan that would pay you $250,000 made up of salary, bonus, commissions, etc. You must then substantiate your gambit. You give the reasons your position should earn that, and then say, “So while the $250 is not unreasonable, it’s probably more than you planned on. Can we discuss how we can start to approach that number?” Those negotiations are much more likely to reach the $200,000 or higher level.
This is a result of a scientifically proven pattern of human behavior, called anchoring that can actually “lift” one set of numbers higher to meet another higher set of numbers that’s already “out there.”
Let me explain. In a controlled experiment, they brought in a piece of original artwork and selected a random group of people to participate in a bidding process. Before the bidding opened though, they had all the participants write down on a piece of paper the last two digits of their social security number. Without exception the bidders with higher numbers on the tail end of their SSN, bid higher for the painting. Why? Certainly not because their SSN had anything to do with the value of the painting but because we are hard wired to think of higher numbers once a higher number (in this case the act of writing down the last two digits of their social) is in play.
A word of caution: anchoring works both ways. Pick a number that’s too low and you can actually drag the whole process, and the offer along with it, down.
So, in summary, if it is security alone you’re looking for, let them go first and accept the offer and try to pull it up. If, however, you’re willing to sacrifice a little security and a little leverage, follow this procedure:
1. Wait for the offer
2. Follow the lockdown maneuver to lock the offer in with a “gentleman’s agreement.”
3. Share your ideal compensation package with full justification acknowledging that your ideal is probably not a realistic option in this situation. Remember, the purpose is to get a higher number “out” which will almost by magic draw their counter number higher than the original top of their range.
4. You settle on a number somewhere in the middle, which will be less than your ideal but is guaranteed to be higher than their offer and almost assuredly higher than the top of their original range.
This process, depending on your salary range, can add five and even six figures to your compensation plan. I can tell you from experience, it already has – many times!
Jack, a veteran career and salary coach, is the author of "Negotiating Your Salary How to Make a $1000 a Minute" first published in 1986 and going into it's 7th edition next year. Jack has become a specialist in all aspects of salary and raise negotiations--from high-profile executive negotiations worth an additional $300,000, to strategies an hourly-wage worker can use to bargain for extra benefits or perks. He has literally helped thousands make millions. You can reach him at email@example.com.
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