Jim is a tenured recruiter. He and I have known each other for some time. He knows that I teach recruitment technique and have for many years. He represents a group of tenured recruiters who, with all due respect, know how to make marketing calls, how to make recruiting calls, etc. In other words, they know the basics, but they also know of my strong predisposition for teaching the “nuts and bolts” of our business.
One day Jim and his group approached me with a request. They wanted me to present them with a more tenured techniquea presentation geared primarily for the tenured recruiter. I suggested a presentation centered on negotiation. Jim agreed, and so I became the student. I went to the library. I visited the bookstores. I read numerous books ons of negotiation. In the end, I pulled information from many sources, but my favorite book was, “You Can Negotiate Anything” by Herb Cohen. Also, I pulled the interesting idea of “psyticements” from “Secrets of a Corporate Headhunter” by John Wareham. The following was my presentation to Jim and his group.
First, the definitions of NEGOTIATION:
Negotiation is a field of knowledge and endeavor that focuses on gaining the favor of people from whom we want things.
Also, Negotiation is the use of information and power to affect behavior within a web of tension.
Basically, Negotiation is made up of three crucial elements: Power, Time and Information.
We’ll discuss these three elements in depth, but first let’s cover a five point preamble of negotiating principles:
1. Don’t be too quick to understand, or prove your intellect, at the outset of an encounter. Watch your “listen-talk” ratio. Learn to ask questions, even when you think you might know the answers. Remember the famous quote by Rudyard Kipling who, when he was asked why he was such a great author, responded, “I had six guides who taught me everything I knew. They were What and Where and When, and How and Why and Who.” Furthermore, if you approach others asking for “help,” it tends to set the climate for a mutually beneficial relationship. At the very least, you’ll cause the other side to make an investment of time that ultimately accrues to your advantage.
2. For an ultimatum (like a Take Away Close) to succeed, it must be delayed until the end. At that point, time has been expended and, thereby, an investment has been made. It should be non-adversarial. It should be made in a business-like manner. You’ll use phrases like, “My hands are tied” or “There is no other way I can go.” And, you’ll have a limited menu choices with limits and parameters. In our business, we use the Alternate of Choice Close to offer to both the hiring manager and the candidate a limited menu. Within reason, you can get whatever you want, if you are aware of your options, if you test your assumptions, if you take shrewdly calculated risks based on solid information, and if you believe you have power.
3. Never enter any negotiations without options. This is sometimes called “The Principle of Requisite Variety.” Know where you’re going. After all, you are like the Indian guide. You know how to “get across the lake.” Each trip across the lake may take you along a different path, but at least you know from where you are starting and where you will end. You have the options with which to operate. And the individual who possesses the most options always controls the outcome. Be noted for your flexibility.
4. People regard with awe anything printed. Therefore, our forms are pre-printed. We send out fee agreements, fee schedules, ‘interview arranged’ slips, fill out job orders and close with invoice worksheets. Remember, anything that is printed takes on greater significance.
5. Tap in on the power of legitimacy in our society. Care, but never care too much. Keep in mind that involvement begets commitment, and commitment begets power. Try to predict the other party’s needs. And, it’s critical to remember that logic, in and of itself, will rarely influence people. Of course, they must understand you. And, you should provide to them overwhelming evidence. But the key is that they must believe that you will meet their existing needs and desires. As the great sales trainer Cavett Robert says, “People are more moved by the depth of your conviction, than by the height of your logic.”
The first element in a negotiating sequence is Power.
The definition of Power is:
The capacity, or ability, to get things done. To exercise control over people,
events, situations, one’s self. As such, it isn’t good or bad; it isn’t moral or immoral; it isn’t ethical or unethical. It’s merely neutral.
I
The Power of Competition
It’s important to let the hiring managers know that you work with different companies. And it’s important that the candidates know that you work with different candidates. We need to instill in both sides the knowledge that they are not “the only fish in the sea.” Instill in them that “time is of the essence,” and if they are not interested in each other, that’s fine because we have other candidates and we have other companies. What we are after are quick decisions. A decision is a Yes or a No or a Subsequent Interview. No other options are possible.
II
The Power of Legitimacy
Anything printed takes on great significance. In fact, we sometimes call this the principle of “The Big Printer In The Sky.” Things that are printed tend to be non-negotiable. In our business, we have Send Out Slips, Confirmation Notices, etc. Anything that is printed is very impactful to the other side.
III
The Power of Risk-Taking
In our business the power of risk-taking usually ties in with the closes that we use. It’s important to realize that we are sales people and we should be constantly aware of the ABCs of salesmanship “Always Be Closing.” One of the strongest closes we use is the Take Away Close. We consider it a strong close because it creates a “win-win” situation. And all we’re doing, in a business-like way, is determining where there is interest, where there is no interest, and closing these deals quicker, thereby, making more placements, and freeing up our time so we can get on to more and better deals.
It’s important to remember that when you have a lot of items on your “Hot Sheet,” it’s much easier to implement strong closes. If you have ten interviews in the works on your hot sheet and you do a Take Away Close and you lose a deal that you were going to lose anyway, you’ve only lost 10% of your business. If you only have two things on your hot sheet and you lose one in a Take Away situation, you’ve just lost 50% of your business. And, God forbid, if you only have one thing and you do a Take Away close (if you’re brave enough!) and you lose it, you’ve just lost 100% of your business. You are basically out of business. That’s why we have a difficult time training recruiters to do some of the stronger, posturing-type of closes when they only have one or two things on their hot sheet. In fact, most top recruitment managers would agree that their recruiters need at least five ‘fulls’ or ten ‘splits’ on their hot sheet at any given point in time to have a chance for a placement.
Also, under the Power of Risk-Taking is the “What If …” Close. If you use the “What If …” Close, nine times out of ten you will get a counteroffer in your favor.
IV
The Power of Commitment
It’s important that mutual cooperation is exchanged before negotiations can proceed. In the recruiting business, we talk about “Agenda Closing” and “Agenda Selling.” In other words, what you want to do is get mutual exchanges of cooperation, and to set up a scenario that can be closed against after the interview takes place. Before the interview takes place, you have to set up these parameters of commitment. If you don’t get mutual cooperation from both sides prior to the interview, you’ve constructed an open-ended situation, and you have nothing on which to close. Indeed, after the interview you might not ever be able to get back to either side over the phone or through personal visits.
V
The Power of Expertise
It’s important to realize that as recruiters, we are the Experts at placing people. It’s important to understand that hiring managers the people we clear fees with are really not hiring authorities. We use that term because we have to clear a fee with somebody. Usually, hiring authorities that use recruiters are in a tough situation and they must bring somebody on board quickly. They are actually paying us to circumvent the time factor. These people are really supervisory authorities who hire occasionally when the need is dramatic. They use a recruiter when the need is beyond dramatic. Often they don’t understand what’s involved in the hiring process. They don’t understand that a minimum of five weeks is usually necessary to recruit a candidate, interview them, make them the offer, get them to give notice and start at the new company.
VI
The Power of the Knowledge of Needs
You need to know the specific issues and the demands of the other side. These are usually in the open and, if you are a halfway decent listener, you’ll find out what the specific issues and demands are. You’ll also need to know the Real needs of the other side. Keep in mind that the real needs of the other side are usually secret. What does the other side really need? Be a good listener. Make sure you can read “between the lines,” so that you can really isolate those true needs and desires.
VII
The Power of Investment
Time, money, or energy must be invested before we can proceed with some of the closes we use, especially, the Take Away Close. There is a direct ratio between the extent of an investment and the willingness to compromise. That’s why Take Away Closes, or some of the stronger power closes, don’t work at the front end of any negotiation. Nothing has been expended yetno time, no money, no energy. Be sure to cover more flexible items first in any negotiated sequence. Then get back to the less flexible items. Use the phrase, “My hands are tied.” This has tremendous impact in any negotiating sequence. For instance, if they are intransigent, you say, “Gee, I’d love to be able to help you. I understand you only want to pay 25% fees, but in that regard, my hands are really tied. Let’s get on to some of the other things we need to talk about now and revisit the fee later.”
When we talk about the marketing presentation, we want to close on the expertise that the candidate has that ties in with the job they’ll be doing. Now, they may not have one or two items that the company would like, so we’re not going to close on those until later. But we are going to close on them, because selling is merely telling the truth in an attractive manner. What we want to do is get that investment of time by closing on the candidate’s qualifications that directly match the position first. Later, we can go back, telling the truth in an attractive manner, and cover the items that the candidate doesn’t match as well. At this late stage, we can then quote my favorite CFO who used to say, “If this candidate is 80% qualified, jump all over him because in this world no one is a 100% match. That person just doesn’t exist!”
VIII
The Power of Rewarding or Punishing
The perception that “I can and might help you or hurt you” gives me muscle. The actual reality is immaterial. In our business it has been said by some hiring managers that they don’t want us to “steal” their people. While that idea might be nice to contemplate, the reality of the situation is that we can’t steal anybody who is truly happy, well-appreciated and making good money. There is an interesting and progressive example from WR Grace where it is said that they like to have their people looking for a better position all of the time for two very good reasons. First, if somebody wants to look, he/she is not truly happy with WR Grace. Let’s say they find another position. They have gotten rid of a disgruntled employee who was probably spreading negative thoughts about WR Grace throughout the company. Or second, that same person looks and doesn’t find anything better. He/she now realizes that WR Grace really is the best company, and the employee is now more contented. Either way, WR Grace contends that it is a win-win situation for the company.
No one will ever negotiate with you in any significant way unless they’re convinced that you can and might help them, or can and might hurt them. In an adversary relationship, if you think I might help you or hurt you, I should never diffuse your perception of my power, unless I get something in return, such as a concession on your part, or a repositioning on your part, that truly benefits our relationship or me.
IX
The Power of Identification
Emphasize your proven track record as a company, an organization, or as a recruiter. Gain their cooperation, loyalty and their respect. Speak to their needs and empathize. But make sure they can identify with you and your organization.
X
The Power of Morality
Is their behavior for the Good of Mankind? Ask if their behavior is “fair and right” When they question a4 fee, you can get on your moral soapbox. Ask, “Is that right? Is that fair?” When they ask for a resume, ask, “Should we jeopardize this candidate’s career? What might be the repercussions if someone in the candidate’s current company learns that our candidate is on the market? Should we get this candidate’s name out when he’s currently working, happy and well appreciated? You never can tell what might happen that could destroy his current situation. We might put him into a tough predicament. Is that right? Is that fair?”
XI
The Power of Precedent
Don’t agree when they say, “We’ve always done it this way.” Use a Similar Situation Close. Explain what happens, or what has happened in the past, with one of the situations where you were involved. If it’s corporate policy, (i.e., a resume is required, only a 20% fee is paid, etc.), you say, “That’s fine. If it’s corporate policy, all I need to do is to talk to the head of the corporation, determine with the head of the corporation if we can change the policy in this situation, and then get back to you. If we can’t change it, then I won’t get back to you.”
Too often, we recruiters penetrate a company at the wrong levels. Often we penetrate at a level just above our candidate’s position. We think that makes sense, but it doesn’t. Penetrate at the highest levels, because you will be treated at the level you penetrate. Rookie recruiters don’t have a problem speaking at the highest levels, i.e., to the Presidents, CEO, etc. They don’t know any better yet. It’s only after we have some tenure (6 months, a year, etc.) that we go lower on the organizational chart to present our candidates. I consider this the Suffering Recruiter (Artist) Syndrome. We are making so much money that we feel like we should be suffering and so we penetrate at levels where suffering will be greatest.
XII
The Power of Persistence
You must be tenacious to be successful. Educate your hiring managers as to how YOU work before they educate you as to how THEY work. Remember, this is a race.
XIII
The Power of Persuasive Capacity
Again the quote, “People are more moved by the depth of your conviction, than by the height of our logic.” And isn’t it funny how we constantly try to “out logic” people? We give them feature presentations and we never get anywhere. You talk about 17 features, and then they want to think about it. Stop trying to out logic people. Use the tone of persuasiveness in your voice. You need to understand their needs. You need to have overwhelming evidence to satisfy those needs. But they have to believe, through the emotion you exhibit, that you can satisfy those needs.
XIV
The Power of Attitude
It’s important to care, but not too much. You need to have a strong attitude. Pretend you have a million dollars in your pocket all of the time, and have a very matter of fact business-like sense when you go out into the marketplace. Don’t sound desperate. Recruiters don’t do well when they sound desperate or when they’re tired, hungry, depressed, sick, etc. A strong, positive attitude comes across the phone and in person.
TIME
There is a quote, “As long as you get there before it’s over, you’re never late.” Keep in mind the most significant concession behavior will always occur close to the deadline. I must know your deadline, but you mustn’t know mine. No matter what the hiring manager says to you especially when the job order has been qualified as to having tremendous urgency every other side has a deadline. They always do. So you need to know their deadline. But they must never know your deadline.
Time can favor either side depending on circumstances. Regardless of these interim interpretations, which may affect the negotiation climate, some of the observations already made are worth repeating:
1. Since most concession behavior and settlements will occur at, or even beyond the deadline, be patient. True strength often calls for the ability to sustain the tension without flight or fight. Learn to keep your automatic defense responses under control. Remain calm, but keep alert for the favorable moment to act. As a general rule, patience pays. It may be that the thing to do, when you don’t know what to do, is to do nothing. Of course, this is easier when you have lots of candidates and hiring managers in the closing sequence.
2. In an adversary negotiation, your best strategy is not to reveal your true deadline to the other side. Always keep in mind that since deadlines are the product of a negotiation, they are more flexible than most people realize. Never blindly follow a deadline, but evaluate the benefits and detriments that will ensue as you approach, or go beyond, the brink.
3. The other side, cool and serene as they may appear, always has a deadline. Most often, the tranquility they display outwardly masks a great deal of stress and pressure.
4. Precipitous action should only be taken when it’s guaranteed to be to your advantage. Generally speaking, you cannot achieve the best outcome quickly. You can achieve it only slowly and perseveringly. Very often, as you approach the deadline, a shift of power will occur, presenting a creative solution, even a turn-around by the other side. The people may not change but, with the passage of time, circumstances do.
INFORMATION
Get the information early when it’s easiest to come by. Remember, negotiation isn’t an event; it’s a process through which you work. In most instances, there’s more to gathering information than playing humble, and merely saying, “Help Me!” Generally, you have to give information in order to get some in return. You gradually give selective information for these three reasons:
1. It’s more blessed to give than to receive.
2. Perceptive people won’t communicate with you beyond the chitchat level until reciprocal risks take place. They won’t share information with you until you have shared some commensurate information with them. To persuade someone to advance to another square, you have to advance to another square, seemingly on an “even-Steven” basis with their revelations. This is mutual risk taking behavior; the deliberate building of a two-way trust.
3. When you give carefully worded and controlled information during the “process stage,” you hope to lower the expectation level of the other side. When you are getting the information, be aware of “indirect” or unintentional cues. Sometimes, it is considered the “Freudian Slip,” things that just happen to slip out. These might be verbal cues, the tone or the emphasis they use when they’re talking. Or behavioral cues, the body language, the tenseness or the relaxing posture, the arms folded across the chest, or open at their sides. Be aware of these indirect cues.
And remember this: The initial “No” is a reaction, not a position. As Cohen states, people who react negatively to your proposal simply need time to evaluate it and adjust their thinking. With the passage of sufficient time and repeated efforts on your part, almost every “no” can be transformed into a “maybe” and eventually a “yes.”
A couple of different negotiatings
Winning At All Cost
This is sometimes referred to as the “Soviet” of negotiation. It’s a win-lose. When one side wins, the other side loses. Does this negotiation stance sound familiar to you?
1. An extreme initial position that always starts with tough demands, or ridiculous offers that affect the other side’s expectation level.
2. Limited authority. The negotiators have little or no authority to make any concessions.
3. Emotional tactics. They get red-faced, raise their voices, act exasperated, and horrified that they’re being taken advantage of. Occasionally, they will stalk out of a meeting in a huff.
4. Adversary concessions are viewed as weaknesses. Should you give in and concede something to them, they’re unlikely to reciprocate.
5. They are stingy in their concessions. They delay making any concession, and when they finally do, it reflects only a miniscule change in their position.
6. They ignore deadlines. They tend to be patient and act as though time is of no significance.
Too often recruiters structure this win-lose position. Keep in mind that when you win on these, you really do lose. You may make one placement with the company, but never do business with that company again.
Mutual Satisfaction
In contrast, what you want is the second type of negotiation stance called the win-win, or the mutual satisfaction type of arrangement. There are many situations in which the needs of the protagonists are not really in opposition. If the focus shifts from defeating each other to defeating the problem, everyone can benefit. There is a need in the company; there is an opening. That’s the problem! Not a fee arrangement. Not whether we send resumes or not. What you want to do is shift the focus to defeating the problem, not each other. In this way, there can be acceptable gains for both sides.
It’s also important to remember not to concentrate too much on the fee. We concentrate on money because we want to know the realistic first year’s income so that we can calculate our fee on that number. But there are other elements that make up a compensation package that make it mutually acceptable to both sides. These things might have nothing to do with money. John Wareham in his book, “Secrets of a Corporate Headhunter,” calls these items, “Psyticements”or Psychic Enticements.
For example, after a candid give-and-take discussion, we set up a situation in which the candidate, who wanted $80,000, will only receive $70,000 in salary, but receive compensation in other forms. In fact, the final accord could call for the candidate to receive the equivalent of more than $25,000 in terms of a company car, an expense account, a country club membership, profit sharing, a free vested contribution to their retirement fund, a low interest loan, a free medical plan, a subsidized dental plan, free life insurance, a hospitalization plan that is 85% company funded, future educational opportunities, stock options, additional time off, an extra week of vacation, control over their own budget, a new office with a window, their own designated parking space, educational opportunities for their children, relocation expenses, a bonus upon completion of each successful project, their own secretary, 2 inches of additional foam under their carpeting so that they can “spring about,” the company purchase of their old home, if necessary, an all expenses paid annual trip to attend the industry’s association convention in Hawaii, a small royalty percentage on new products developed, and finally, a spa or hot tub in their office.
These, then, comprise a partial list of Psyticements of which you need to be aware, that you can use to put salary packages together.
In conclusion, keep in mind that with the Win-Win situation:
1. You see the problems from their point of view, to qualify the objections that come up. Build trust in this relationship.
2. Look to sharing and creative solutions. Gain their commitment. Use the “If I…Will You” trade off type of close.
3. Manage conflict by managing opposition.
Keep in mind the definitions of the three crucial elements of Power, Time and Information. Try to avoid the “Soviet,” the winning at all cost type of negotiation stance, where one party wins and the other party loses. Strive for mutually satisfying agreements a win-win type of negotiation. If you do this focusing on the problem and not on each other and developing this kind of win-win negotiating type of technique not only will you make more placements, but also more money will accrue to you and your family. Alas, you will make multiple placements with the same company. And that, in the final analysis, is one of the secrets of the Superstars.