Executive Centre

How to negotiate with a potential employer

Indian executives are not at their best when it comes to negotiating employment contracts, compensation, incentives, etc. They are overwhelmed by an employer’s perceived power during job-offer negotiations

Hired as a COO in a Swedish mobile phone handset provider’s Indian operations, Ravi Murthy wasn’t happy. After all, having his past successes (read: almost a call a week from several headhunters), technical credentials (read: IIT, IIM) and great references, he should have been able to walk through the employment terms negotiations. However, six months down the line, he is thinking of quitting. Reason: the offer was not that exciting to start with, added to that the incentive plan is hazy.

Ravi had been aggressively approached, sailed through the headhunter’s initial screening, he had done his homework on the company and was just the right guy, “tailor-made” for the job. He seemed to have all the leverage he needed. So what happened?

When negotiating business matters involving others, Ravi is highly skilled and he can negotiate to an embarrassing extent. In his interview, on being quizzed on his negotiation expertise, he narrated a long story of how when he was part of India’s fastest growing CDMA service provider, he started the discussion with Qualcomm on license fee as “it is not us who have to pay you a dollar for every subscription, how about you having to pay us a royalty for popularising CDMA!”

However, when it comes to negotiations involving his role, compensation and performance ince-ntive, he believes that he didn’t effectively present his case. This cost him financially and reduced his clout in his new role. It didn’t pinch him much till the time someone whom he hired as a subordinate made him realise what he had foregone.

Certainly, his new package isn’t insulting, and certainly for him, a few more lakhs doesn’t mean hitting a jackpot. But this matter isn’t trivial or without repercussions. Perhaps he started showing resentment or hid his perceived loss of standing by being too aggressive. He may have displayed less self-control and self-confidence or felt more passive or conflict-averse than usual and hence resigned. None of this bodes well for his stature.

In India, people contemplating marriage spend more time and effort thinking about the wedding than about married life. They don’t realize that the wedding is only a threshold event. Similarly, many job seekers see the interview and selection process as an end unto itself. They don’t want to evaluate what contribution, what value addition the job brings to the company and correspondingly peg a price as to the true value for the work. When immersed in the hiring process, many candidates get caught up. Rather than seeing it as the foundation for long-term relationships or a way to gauge the working environment, they try to “win” the interview and get the offer.

In the heat of the moment, even the most sophisticated executives lapse into a reactive, shortsighted mindset and communicate from their heart, since they “need the job”. Rather than being an exchange of relevant information or an exercise in rapport-building, the interview process becomes a form of ritual completion, spelling a one-sided affair from the employer’s point of view.

Confusion is worst compounded as HR in this country is notorious for unstructured hirings.

So what’s the way out? For starters don’t let your eagerness to look good or please screeners hamper your resolve to learn all you can about your role, the company, the importance of the former in the latter, the future plan, et al. Ask relevant questions on the same.

You should know how performance would be gauged, yours and that of others. Ravi isn’t sure about his standing because he allowed the hiring process to be superficial. They postured. He postured. Now no one knows where the other stands.

A surprising number of executives leave attractive jobs after short, unsuccessful tenures. They often say they realized during the interview itself that there could be a problem, but they didn’t want to make waves. They hoped for the best...and…got the worst.

Particularly at the C level, a quick choice can be catastrophic. If there is ambiguity in the thoughts causing concerns in your mind, in the discussions, it’s better to air them during the selection process itself. If they are deal-killers, so be it.

Ravi and his new employer didn’t intend for his interviews and negotiations to be winner-take-all battles. What battles? There are no battles; his interviewers weren’t trying to bargain for advantage nor were the hirers trying to drive home a point. In employment negotiations, both with words and demeanor, a candidate for a leadership position should seem as powerful and decisive as possible—despite wanting the job badly. Meek guys may try to appear tough; conservatives may try to look entrepreneurial. Ravi got caught here.

Knowing that he can be aloof and opinionated, he tried to seem personable and collaborative. He may have succeeded too well—coming across as more accommodating than he really is. He made himself likable and showed he could address the organization’s needs. But in so doing, he didn’t get his needs and priorities articulated which costed him dearly.

Ravi’s authority was diminished in a few steps during the negotiations. When he agreed on a point, the employer liked it, so he deferred more. Pretty soon, he felt the leverage and momentum shift, and he couldn’t reassert himself without appearing aggressive. He lost power for negotiating his employment terms and compensation.

In the interview process, potential employers invariably have the upper hand. They set the pace and appear to define the rules of engagement. If the interviewee tries to over-control the process, the interviewer can reassert power by showing him the door. Therefore, skillful candidates shift everyone’s perspective from the immediate negotiations to the long-term “benefits of the bargain”—how the company stands to gain by the selection and why. They keep reminding the employer of the marriage, which has to last not just the wedding.