Negotiation is a type of discussion used to settle disputes and reach agreements between two or more parties. Generally, a negotiation results in a compromise where each party makes a concession for the benefit of everyone involved.
Negotiations occur frequently within the workplace and may occur between coworkers, departments or between an employee and employer. Professionals may negotiate contract terms, project timelines, compensation and more. Negotiations are both common and important, so it’s helpful to understand the types of negotiations you might encounter as well as how to improve your negotiation skills.
Negotiation skills are qualities that allow two or more parties to reach a compromise. These are often soft skills and include abilities such as communication, persuasion, planning, strategizing and cooperating. Understanding these skills is the first step to becoming a stronger negotiator.
The skills you’ll need depend on your environment, your intended outcome and the parties involved. Here are a few key negotiation skills that apply to many situations:
Essential communication skills include identifying nonverbal cues and expressing yourself in a way that is engaging. It is important to understand the natural flow of conversation and always ask for feedback. Active listening skills are also crucial for understanding the other party. By establishing clear communication, you can avoid misunderstandings that could prevent you from reaching a compromise.
The ability to influence others is an important skill for negotiation. It can help you define why your proposed solution is beneficial to all parties and encourage others to support your point-of-view.
In order to reach an agreement that benefits both parties, it is crucial you consider how the consequences will impact everyone in the long-term. Planning skills are necessary not only for the negotiation process but also for deciding how the terms will be carried out.
The best negotiators enter a discussion with at least one backup plan, but often more. Consider all possible outcomes, and be prepared for each of these scenarios.
Tips to improve your negotiation skills
Not all forms of negotiation are effective, and measuring success can be challenging. To evaluate your effectiveness, it is wise to identify how well your intended outcome aligns with the final agreement.
Follow these tips to improve your negotiation skills:
- Identify the final goal
What are the minimum terms you need? How much are you willing to negotiate? It’s important you enter negotiations knowing what you want out of an agreement and how much you’re willing to compromise. For example, your ultimate goal may be to negotiate a salary of $80,000, but you would be willing to settle for $75,000.
- Practice building rapport
Successful negotiation requires you to effectively communicate not only your own goals, but also to understand the other party’s wants and needs as well. In order to reach an agreement, building rapport is essential. This can assist you in easing tension. In order to build rapport, showing respect for other parties and using active listening skills are critical.
- Be willing to compromise
Without compromise, it can be nearly impossible to reach an agreement. By preparing ahead of time, you will already have an idea of the terms you’re willing to sacrifice as well as the ones that, if they aren’t met, you would be willing to walk away from the deal.
- Consider imposing time restrictions
Setting a timeline on the negotiations motivates both parties to reach an agreement. If terms cannot be met in that time, the two parties can take time to reevaluate their needs and return at a later date.
- Take the multiple offer approach
By presenting multiple offers at once, you can save time in the negotiation process and increase the likelihood that you’ll agree on at least one of your preferred outcomes. If the other party declines, you can then ask for feedback on each one and revise terms until you reach an agreement that meets everyone’s needs.
- Exercise confidence
It can be challenging to ask for what you want. However, successful negotiation requires self-assurance. By exercising confidence in your negotiation, the other parties can be more inclined to believe in the benefits of your proposal.
- Don’t take “no” personally
Sometimes, each party’s goals and needs are too different to reach a compromise. When this happens, evaluate the process, consider why things that did not go as planned and look for ways you may be able to improve your efforts next time.
- Understand your weaknesses
Take time to identify your areas of weakness and focus on growing those skills. For example, you may need to improve your ability to build rapport or your power of persuasion. Understanding your weaknesses is the first step to overcoming them.
One of the best ways to increase your comfort in negotiations is to practice often. Consider trying a mock negotiation with a trusted friend or colleague.
Types of negotiation
Most negotiation outcomes will fall into one of two categories: Win-Win or Win-Lose. By understanding the different types of negotiations you may encounter, you can determine the most relevant skills for your role and work to improve them.
Here are forms of negotiation:
Also called distributive bargaining, this form of negotiation occurs when there is a limited amount of resources and each party assumes if they lose something, the other party will gain something. Instead of each party attempting to come to an agreement based on their interests and needs, each party is working to get more than the other party. For example, a client may feel if a provider does not lower the price for a service, they will be paying too much, and the service provider may feel if they decrease their price, they will losing money.
Often referred to as a “win-win,” an integrative negotiation occurs when everyone benefits from the agreement. In order to come to an integrative agreement, each party receives some value. The integrative negotiation process may take longer because both parties have to feel fully satisfied before coming to an agreement. For example, if a client believes a provider should reduce the cost of their service to $800, and the provider believes they maintain the cost of their service at $1000, the two parties may negotiate to a $900 service. In this case, both parties “win” $100.
Negotiating with management can be stressful. In some cases, employees may feel uncomfortable sharing their wants and needs with someone in a more senior position. However, you’ll often encounter this sort of negotiation during the job seeking and hiring process. You may have to negotiate your salary, benefits and job duties. Each of these elements can directly impact your job satisfaction, so it’s essential to address them. Additionally, negotiating these factors gives you an opportunity to demonstrate your communication skills to your employer. You might also have to negotiate with management in your current position when re-evaluating your employment contract or requesting a raise.
Depending on your job, you may have to negotiate with your coworkers. Many positions require close teamwork and without strong negotiation skills, you may face imbalances in work distribution. Negotiation skills allow coworkers to develop a plan that benefits the whole team. You may also have to negotiate when solving conflict in the workplace.
Some employees manage external vendors, and their performance rating may be affected by how they negotiate. Also, the ability to reach an agreement with service providers can affect your professional relationships and general business success.