Successful Negotiation is a Party of Three

Author: Evelyn Davis

It’s time to buy a new car. You know exactly what you want. You do your research, formulate what you think is a fair counter offer to the sticker price. You stride into the dealership, make your offer, and the salesman enthusiastically accepts. You are surprised. Why?

The salesman did not follow the rules of negotiation. When he leapt on your offer, you were doomed to wonder what you really should have paid. At the very least, the salesman should have concealed his delight at your offer, and put on a show of reluctance to accept it.

Unnatural behavior

Negotiation is not inherent in our culture. The only times Americans understand it is acceptable to negotiate is when buying homes and cars. Thus, we are not very good at negotiation because, unlike other cultures that negotiate daily for many purchases, we don’t practice. When was the last time you asked the waiter to take half price for a steak dinner?

Another realm where negotiations are fairly common is an employment offer at the executive level. Emotion and ego play a role in executive level negotiations and using a third party executive recruiter keeps the exchanges on a fact-based playing field. While most executive applicants understand they can negotiate on salary, fewer understand the wide range of negotiable points on the table.

As the hiring decision-maker, it is vital that you understand the negotiable components of your offer, and learn which have value to the candidate. Most companies have a salary range for a given position. Typically, the goal is to hire the best candidate at the midpoint of the salary range. Let’s say the midpoint of the range is $150,000 but your candidate asks for $175,000. The smart move is to invite that candidate to view the job offer n in the context of an overall total compensation package.

What’s on the table?

As you know, a number of items are negotiable. Every company has a different list of negotiable provisos that constitute its employment package. The well-prepared decision-maker knows exactly what is in his or her arsenal to offer prospective executives:

• First year guaranteed bonus

• Equity or ownership

• Stock options

• Frequent performance reviews

• Company car or car allowance

• Time off

• Cell phone

• Company product discounts

• Travel modes and accommodations

• Personal chauffeur

• Country club, athletic club and trade association memberships.

Generally speaking, larger companies tend to have fewer negotiable points than smaller companies. Smaller organizations may have more leeway to modify policy to attract top talent.

It is important for each hiring manager to understand those areas that have the potential to be negotiable chips in the quest for executive talent.

Each negotiation is personalized. What resonates with one candidate may have no value to the next. That’s one reason many companies choose to use a third-party executive recruiter for hiring executives and conducting the negotiations. The executive recruiter not only understands the nuances of the process; he or she assures the negotiation proceeds in an appropriate manner and deflects emotional responses that might harm the working relationship moving forward.

Who has the power?

Negotiation at executive levels is not for the faint of heart. It is key to understand the nuances of the negotiation process and apply them at the right moments. It’s important not to dread the process. Top candidates who are well-suited for your executive-level position are not going to fly out the door at the suggestion of a compromise. And, at the conclusion of the negotiation, both parties must be satisfied with the final outcome. The burden for assuring mutual satisfaction with the result of the negotiation is squarely on the shoulders of the hiring party, with the possible help of an executive recruiter.

After all, it is the company that defines the environment and the parameters of the negotiation. It is the recruiter’s responsibility to facilitate the communication of these parameters.

At the executive levels of hiring, the candidate must join the company feeling wanted, valued and welcomed. The negotiation must not leave the new executive feeling resentful or under-appreciated.

Likewise, it is not ideal for a company to overextend itself to hire a candidate. This creates that uncomfortable atmosphere of, “O.K., hotshot, now you better deliver above our expectations because we’re paying you more than we expected.” Executive recruiters offer expertise during the negotiation process. The purpose of the negotiation is for the search consultant to bring the two parties together.

Watch your toes

At executive levels, it is imperative to understand and execute the negotiation process with finesse. The process enables each side to measure the other, learn about styles and issues. For example, if the negotiation comes down to future terms, such as a three-month review or a six-month incentive bonus, make sure you follow through on these – and don’t wait to see if the executive reminds you. He or she will be pleased if you follow through on your promises.

Time is on everybody’s side

As authentic executive talent becomes rarer, negotiating the offer for an executive position becomes an effective triangulation among company, executive recruiter and candidate. Highly talented candidates are interviewing you as much as you are interviewing them.

Good negotiation generally takes time. So adjust your clock, slow down your timetable and allow time for an executive recruiter to lead your candidate and you through the negotiation process.

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About the Author

Evelyn Davis is partner and senior vice president for EFL Associates (, a national retained executive search firm and TRANSEARCH ( Partner in the USA, with offices in Kansas City, Denver, Chicago and Boston. For more information, please contact Evelyn Davis (evelyn.davis at