Welcome back to HR Coffee Time. It's wonderful to have you listening today. I'm your host, Fay Wallis, a career and executive coach with a background in HR and I'm also the creator of The HR Planner. I've made this podcast especially for you to help you have a successful and fulfilling HR or People career without working yourself into the ground.
And I am so excited about being able to share this episode with you because I've wanted to cover negotiation skills on the show for ages. One of the challenges that I've experienced myself and that you might be experiencing too, Is a need to develop better business acumen.
Business acumen is now one of the core knowledge areas of the CIPD profession map which I think is a good thing because by developing our business acumen we can prove that we're able to add huge value to any organization that we're part of. And one way of developing this better business acumen is to get confident with negotiating costs for the business.
So you can bring those costs down or improve the value the organisation is gaining from its suppliers. Unless you are working for a truly enormous organisation like the NHS, where all supplier negotiations are handled by a procurement team, you are going to find yourself having to negotiate at some point.
Whether it's with the recruitment agencies you use to fill vacancies, or the supplier of your HRIS system, or the company that administers your benefit scheme for you, there are a whole host of occasions when negotiation skills can come in handy and you are able to really add value to your organisation from a financial perspective and impress the senior leadership team at the same time.
If you're anything like me, you might dread the idea of having to negotiate with a supplier. If you're not like me, I really envy you. It's something my family has always joked about with me, that I'm the one person who'd probably negotiate a price for a service upwards instead of downwards. I haven't found anywhere
that teaches negotiation skills specifically for HR and People professionals before, and it isn't training that I was ever offered during my own HR career before I became a coach. So if you are like me and you've always dreaded the idea of negotiating, it's not really surprising because we've never been taught how to do it.
Although I have to say I don't dread it nearly as much anymore.
But the reason that I'm not dreading it nearly as much is because I met the fabulous Simon Duncan this year. After searching for ages for someone who teaches negotiation skills and really knows what they're doing, I was lucky enough to meet him. Simon has decades of commercial experience within the retail industry, operating at a senior level where he became an expert negotiator, successfully negotiating deals that saved millions of pounds for the companies he worked for.
I'm really thrilled that he agreed to come on the show. I hope you enjoy learning from him as much as I have.
Let's dive into the main part of the episode and go ahead and meet him now.
Welcome to the show, Simon. It's so fantastic to have you here. And I thought I would dive straight into the topic and our chat today by asking you if you can explain to us what negotiation is. How would you define it?
Well, first of all, thank you very much indeed for having me on. It's really good. Yeah, the definition of negotiation, and this is where some people really do quite often get it wrong because they think it's all about confrontation.
Whereas actually, it's really about entering into a discussion with the aim of reaching a mutual agreement. So negotiation should be about collaboration in order to achieve a successful outcome that secures a, secures a commercially and sustainable partnership for both parties to maximize opportunities going forward.
So it's about really understanding your counterpart, engaging them in dialogue, that creates an open, honest, and respectful forum, in order to be able to discuss and, be able to come to creative solutions.
I suspect that that might come as a bit of a surprise to some people. I know that my view of negotiation used to always be that, oh, it's a bit scary and cutthroat and potentially aggressive.
So hopefully that's going to be a reassuring message for people to hear. And you've already alluded to some of the things that you have very kindly taught me when I came on your negotiation skills workshop that help make it a real success and not feel uncomfortable or horrible. Because you think it's so important to take this collaborative approach.
And because I have been lucky enough to attend one of your negotiation skills workshops, I know that you passionately believe that following a set process in negotiations leads to successful outcomes. And this process is made up of four distinct phases, which are planning, launching, undertaking and securing. I know we haven't got time to cover each stage in lots of detail today because it took you a whole workshop, a whole full day workshop to go through all of them with me, but if you could pull out some of the most important aspects of each phase for us,
that would be wonderful. And to help bring the process to life for everyone listening, I thought we could do it in the context of an HR or People professional wanting to negotiate with the recruitment agencies that they've been using to help them fill their vacancies within the organization. Does that sound okay?
Yes, okay, yeah, not a problem.
Okay, so, Simon, let's imagine that you have got an HR or People Professional in front of you today and you're going to explain the planning part of the process to them. What would you say?
Right. Okay. Well, as you say, having a robust process is essential. And yeah, you can split it down into those four stages, as you've mentioned.
So the first stage is planning and planning thoroughly in advance is critical. And indeed, it's the most important part of the whole four stages. Basically, if you've planned thoroughly enough, it will give you two significant strengths before you actually enter the negotiation. That is confidence, because you'll know the information, and by having confidence, you have the ability to take control.
So what are those areas of planning that you need to consider? And I'll try and bring it back to your, your example about recruitment agencies. First of all, you need to be really clear about what you're trying to achieve. What are the current facts? So in other words, what's the current status of the partnership that you've got already?
How does that relate to other like partnerships, perhaps with other recruitment agencies? And how does it relate to the marketplace in general? And then you need to consider things such as the balance of power. So with the business, with the recruitment agency that you're going to be talking to, or indeed more specifically, the actual particular person within that organization that you're talking to. So if you consider the value of the relationship across each of the all recruitment agencies, this will then basically influence the approach that you're going to take.
So you might have one recruitment agency who has filled perhaps a couple of roles for you over the past year, but doesn't particularly seem to be that engaged with you. And then you may well have another recruitment agency that has filled multiple roles and delivers a great service. So you can approach them in different ways in terms of this balance of power.
You can take a direct approach with both of them initially, but then they'll, you know, your first ask if you're trying to reduce fees, for example, is it is that they're likely to come back and and say look we can't do that or whatever So with the two different ways of approaching it, with the one that you, you are not so engaged with, you can basically defend your position and absolutely be very blunt about, no, we have to reduce fees in order to be able to undertake the partnership going forward.
However, with the other one where there's engagement already, you can actually be a little bit softer with them in terms of say, look, why don't you come in to us, have a discussion, which explained to you about our future strategy. And start thinking about what potential compromises you might be able to make.
This is where, going back to the definition of negotiation, it's about mutual agreements. So that's balance of power. You then need to think, this is all in planning, you need to think about what we call mindsets. So obviously think about what's important to you, absolutely. But also think about what's important to them.
You know, what do they want out of it? What do they perhaps need? And what do you think they might be prepared to agree? So a lot of the time it's about, you know, business to business. One of the most important things for longevity is about actually just retaining that relationship. So their business but more importantly, the specific agent you are dealing with.
It's where you need to think about their mindset because the particular agent is the one who's going to be earning the commission. So you may be in fact more important to them rather than the total agency. Then there's justification. What's the justification of yours? How can you build a story based on facts that justify your ask, but also shows opportunities for them?
So this is where we're going to compromise. So you might be starting things off by saying whilst we want to improve the terms and reduce the fees There is opportunity for both our parties to grow going forward. And then you need to think about where are you going to actually open your negotiation?
What's your starting point? And that's what's called the anchor and you need to open slightly extreme to what you actually really want and then you need to consider what is the minimum that you can accept, and that's called the breakpoint. But also, having thought about the mindsets, think also about what their breakpoint might be.
And then once you've got the anchor, and you've got the breakpoint, you can then think about various variables or compromises you might be able to bring into the negotiation. What other things might there be to prepare to give in order to make the overall deal beneficial to you? So with regards to recruitment agencies, if they're not prepared to accept your first position, in other words anchor, you can start bringing things in like whilst they provide you CVs, could they also provide you bullet points about why they think a particular person is right for your business?
Can they provide psychometric tests free of charge? Can they give additional coaching to the successful applicant to ensure that they succeed within the first 90 days? Now those three examples I've just said are not necessarily financial benefits. But they will improve the service. So it's creating the overall deal.
And then in return, you might say, okay, well, we may well offer you a longer term security of the agreement. In other words, retention of the business. And indeed, you might be able to say, okay, we'll actually improve our payment terms with you. You know, we'll make them faster, although we'll base them on settlement discounts.
So in other words, you know, we'll pay you in 90 days But that's net but or we could pay you actually a damn sight quicker in 30 days But for 30 days, we want five percent settlement discount. The key thing is everything that you give should be conditional on getting something back And from this you can then plan a number of moves between your anchors in your break points Which, when used, will appear as being collaborative, considered, empathetic to their needs.
And importantly, as I've said, if you give something, what can you get in return? So that effectively is a quick synopsis of what's you need to think about in planning.
And for anyone listening, I wish you could see the planning templates that Simon has shown me. They are phenomenal. I have never met such an organized and prepped person in my whole life.
So what Simon's talking about here, about thinking about what kind of things could you ask them for if they're not able to reduce their fees as much as you'd ideally like them to, when he's talking about things like providing a better service and maybe offering psychometric testing or first 90 days coaching.
Simon's got a template, a document where he writes down every single thing he can think of that he could potentially ask them for as part of the negotiation. And also I think on there, gosh this is from memory now, it was a little while ago I did the workshop, there are things written down on there as well for of what it is that you'd be happy to accept from them.
Is that right? I feel like I might be getting a bit muddled about that.
Yeah, I think I think you're right in in terms of the planning with all the sort of variables or possibly compromises If you internally sit down and brainstorm it, you'll probably be able to come up with 10 or 15 different compromises that you might be willing to prepare to give.
And then when you plan it, as you were saying, these templates that I have, you, you plan each of your moves. So you've got your anchor position, which is, you know, we want a 10 percent discount on the fees. Because our business is growing, there's an opportunity for you. Now they're unlikely to accept that.
So then you have a second move that says, Okay, fine, maybe we might be able to compromise, and we'll agree 7. 5 percent discount in the fees. But that is on condition that you provide us psychometric tests free of charge. And then you have a third move, a fourth move, and a fifth move. Probably not more than five moves.
But going back to the mindsets, which you've already pre considered, you're probably going to understand where they're likely to bite back on or where they're likely to go Oh, actually that seems like a reasonable agreement. So it's doing that all in the planning stage even before you start, you know in the negotiation. It's all really thinking about how are you going to move creatively that shows collaboration.
And that was just such a revelation to me the first time you explained it to me, and now you've explained it again. Thank you Simon. Because I'm also now thinking as you're talking how helpful these skills are, not just for negotiating with external organisations and external suppliers, but also internally. I have met so many HR and people professionals who get frustrated, totally understandably, because there's someone in the organisation who might be blocking their plans or not allocating the budget that they want.
And I know, if I think back to when I was in my HR role, I would probably go forward and say, here's my case, this is why I'd like to secure this budget. This is the project or initiative that I would like to roll out and then the CFO or the finance director or the MD or whoever it is says, No I disagree or you can't have the budget we haven't got the money, yeah seems like a okay idea but no. And then you go away with your tail between your legs and feel really disappointed and frustrated.
I had never gone in thinking, right, if they say no, what am I going to suggest next? What could my next move be? How do I think they're going to respond? How can I make this more attractive to them and the challenges that they're up against? So I'd really encourage everyone listening to think about, gosh, how can you be using these skills internally as well as externally?
Absolutely. And you know, doing stuff internally, coming back to that point I said about mindsets, because you've probably already got a better relationship and you know that person more, they're internal, they work with you, you should be able to gauge what's important to them, what's on their agenda, what's their stresses, and therefore, yes, you go in with your ask, as you've said Fay, but absolutely, you know, nobody in a negotiation is going to accept the first thing.
So you need to be prepared to show a compromise or a solution or be creative, show empathy to them, that you're supporting them. So that's why this is really important to think about your anchor. And your breakpoints and then your moves in between on what you can actually compromise on.
Well, hopefully everyone listening now, you've got them all excited and thinking, right, I totally see the value of planning.
I can't wait to start trying to put some of these fabulous ideas of Simon's into action. So let's take them on to the next part of the process, the second phase, which you call launching.
Can you talk us all through that?
It's launching. But also there's a bit of preconditioning, which is quite good to do. And when I say preconditioning, I mean, it's quite good to release a flavour of what you're going to be asking them in advance of even getting close to the negotiation. So, you know, with the recruitment agencies, again, you might be talking about a particular applicant at a particular point.
But it might be quite good just to throw into the conversation, just say, Oh, I've just come out of a board meeting and my CFO is really pushing me to you know, improve the, the fees, et cetera, but we won't talk about it now, but I might need to come back to you in, you know, three months time or something.
What that means is that when you then do go to get reduced fees, it's basically softened the blow. Cause you can actually go, remember I did tell you this, you know, I was very open about it, et cetera. So when you then get to the actual proper launching of the negotiation with a recruitment company, for example, it's quite good to actually set out a well considered communication. You know, send them a letter or an email that basically sells the story that's based on facts and lays out the positive upsides for the potential opportunities.
So it may be something about, look, our business is going from strength to strength, or we've now got new investment into the business. Or we've updated our strategy. So in other words, you're showing serious step changes within the business and you're giving them what is going to be the opportunity.
That's your sort of first couple of paragraphs, your second, your last paragraph or penultimate paragraph will then be, and because we are doing this, we need to ensure that we have a commercially robust, sustainable model going forward. And therefore, from such and such a date, we will be reducing our fees from X to Y.
Thank you very much. We look forward to continuing to do business with you. So that's how you launch it initially to get them around the table.
So it's very firm. You literally say, this is the new rate that we want you to work to.
At the outset. Absolutely. And then you'll get, you know, your various partners or recruitment agencies in this example, coming back to you and going.
Are you mad? Are you ridiculous? Those are the ones who have the strong balance of power and it's those ones you can then say, look, I appreciate the letter you received from the CFO. Because you don't send it from yourself. Send it from the CFO. You know, why don't you just come in and we'll have a conversation and a bit of a chat about it.
In other words, read between the lines, come in and have a negotiation. However, going back to that recruitment agency where you didn't really have that, you don't really have a great relationship currently, You can go back to them and say thank you very much indeed for your response. However, we must ensure that we have this model going forward and therefore these terms are unnegotiable. And that's your defend position. So that's where the balance of power, how you actually respond to the feedback that you're going to get.
I know everyone's going to be thinking, hmm, interesting. Why should the CFO be sending out the letter?
Right, good point. I like to send things from the CFO because virtually, all partners don't know who the CFO is. They also think, CFO? God, that's a bit scary. And the thing is, if it comes from you, it makes it too personal.
So you send it from the CFO, and usually what I do in my communications is that I will give internally the people a script to say, look, this, this communication is going to go out from the CFO. Undoubtedly we're going to get responses and you individually are likely to going to be contacted because you're their day to day contact and the script will effectively say yes, we are aware of our CFO's communication to you.
Yes, isn't it great? We've got great opportunity. There's business investment, da da da. Appreciate there's changes in the terms. If you want anything further, any further communication, don't try phone the CFO because, you know, he never picks up the phone. Can you email CFO board at such and such a company?
What that then does is makes your counterpart slow down and think and try to articulate in the written language, which is very different from verbal, how they're going to communicate and push back. And once they then push back, you'll have visibility of that email because your whole internal company will be aligned in what you're doing.
Then you can decide, right, I'm going to defend my position politely. Or I'm going to invite them in for a conversation. And that's where the balance of power comes into play. You know, which, which way do you go?
There are a couple of things that you said there. One is that my brother is a CFO, so I can't wait to talk to him about this and say, have you thought this is how you could be supporting people in your organization when they're going in for negotiations?
But the second, more serious point is one of the biggest takeaways I have had from meeting you, Simon, and learning so much about negotiation with you, is how valuable it is to strip the emotion out of it. And I think that that is what you've just described helps to do. Because so many people listening are passionate, committed, dedicated HR and people professionals.
You can't help but start to feel emotional about things when you are entering into negotiations. And again, I'm probably thinking of this a little bit more internally as well, but also externally. I mean, I get so nervous at the idea of having to negotiate with anyone. I, it just triggers an emotional response.
So I think all of these tips that you have that help to strip that emotion out are incredibly useful and they can really help us to do so much better with refining and honing really good negotiation skills.
Stripping out that emotion, you're absolutely right. It's very difficult to do, particularly if you have a close relationship with the particular partner you're going to be talking to.
But this is where your sort of planning comes into, it's about having the control, it's about talking about facts. And yeah, you absolutely need to take your own self emotion out of the negotiation.
Well, I could carry on talking to you about this stage of the process for ages, but I know we've got two extra steps to talk about as well.
So let's move on to the third part of the process, which you call undertaking. And I've just said that I find negotiation challenging anyway. Well this is the part that I personally find most challenging, and I'm sure lots of other people do too, this is the moment when you actually have to do the negotiation with the other person.
But I know as well as all these great tips you've given us to set us up for success, you've got some fantastic tips to help this part of the process go smoothly as well. So can you share a few of them with us now?
If you've done your planning, you're gonna be confident.
So at the outset of the negotiation, you need to take the control. You need to control the agenda and the pace. You need to consider how and what you're going to say. And this is the power of articulation. So you might say that there's opportunity for both parties here. However, we must secure this reduction in the fees rather than saying words like, you know, what I would like is, or can we get to something around?
That's all very weak language. So you need to be very careful of the words you use. You need to create an environment based on respect. and empathy and bonding. You need to creatively move in a timely manner between your anchor and your breakpoint, you know, basically showing collaboration and compromise.
And also throughout remain calm, the more you've planned, as I said, the more in control you're going to be. And then there's also the use of what we call the powers of. There's basically the power of speech, pace and clarity. Slow down. Only say what you want to say. Once you have said what you want to say, stop.
Go silent. Or, ask an open question. Get them talking. It will put them in their comfort zone. And they've not planned as well usually as you have so they will talk and they will talk and they will talk. So you have to show active listening and more importantly hear what they say because If they continue to talk and talk, they're very, very likely to give away what's really important to them.
And you might be able to pick up on something that is a compromise that you can give that's a low cost to you, but will be considered a high value gain for them. There's other things like body language, you know, consider yours, but be aware of theirs. Are they in control? Are they confident?
Are they telling you the truth? And then there is something called about the power of ego. Basically, don't let your ego enter the room. It's not about you trying to personally win. It's about the business. But indeed, pampering to somebody else's ego can actually be quite useful. You know, everybody loves their ego stroked and so you can use things like actually that's a really good point I completely and totally understand how can we create a solution from what you're saying as the experts in this field.
And actually if you say those sorts of things then you're likely to actually get them to be much, much more collaborative with you. So that's sort of the, the key things about undertaking. I mean, there are various things about how you manage the stress and emotion, which We can come on to if, if, if we have time.
Oh, but it's so helpful to hear all of that. And definitely I can see how using the strong language and not talking all of the time, taking your time is going to make such a difference. I always cringe when I hear people talking about ego or stroking someone else's ego. It just feels a bit uncomfortable to me, so I prefer to think of that part as thinking of how you can build the relationship with them and show a genuine interest and a genuine appreciation for them.
So I just thought I'd mention that in case anyone listening has that reaction that I do.
Yeah, yeah, I, I, I get that. And also just coming back to, you said about using strong language. Yes, it is. It's a strong language at the outset. But as you go through the negotiation, and if you are getting sign of collaboration and compromises, then you can start to soften the language.
But initially, you need to sort of make firm, non aggressive, but firm statements. Short, sharp statements.
It reminds me of when I did my teacher training, Simon, a million years ago now. And the advice I was given when I first stepped into the classroom in my very first proper teaching job was, they said, Go in firm, and you can ease up later.
You want to make sure you've got the authority to begin with.
Yeah, and it's, it's, it's about this control. You know, you need to take the control at the outset. And then as I say, you can become more empathetic as you are getting sign of collaboration and compromise.
Fantastic. Well, we're now at the final part of the process, which is called securing. Can you talk us through it? What on earth does securing mean?
Well, what I've found lots of times when I've watched people in negotiations is one, first of all, they go into a negotiation feeling nervous and anxious, which is, which is quite normal.
And they're very keen just to get the conversation done and, you know, over and finished and out of the room because they're thinking, Oh God, this is really terrible and awful and uncomfortable. But no agreement is secured unless it's formally. So some of the tactics in terms to ensure that you do get a properly formal secured agreement is throughout your negotiation, but critically at the end summarize clearly what has been agreed.
And this will ensure complete understanding and avoid you going backwards. And also, right at the very end of the negotiation, once you've summarized the absolute key points of the agreement, actively display or gain a physical or audible sign from, from the counterpart. In other words, it can be as simple as, all right, are we agreed on that? Let's, you know, let's shake hands.
Or it's a case of, right, I've summarized the points very clearly. I trust you agree this. Is this correct? Yes? And once they've shown a handshake or they've said yes to you, there is a, there's a bit more of a commitment there. And then you need to go on to say, right, I'm really pleased that we've got everything agreed.
What I'll, what I'll do in the next 24 hours is I'll send you an email, bullet pointing all the points that we've agreed. And then within the next three days, I will draft an agreement and send it out to you for signature. And by doing this, it will avoid any misunderstanding. It will result in a final closure of the agreement without the need for going more protracted discussions.
You've got to maintain that momentum from summarizing your agreement to getting an email that clearly defines it. to actually getting a signed agreement done.
I can absolutely see why that's so important. In fact, I did, I've been doing a lot of training this year as always. I did mediation skills training at the beginning of the year.
And that's the final part of that process as well, actually is that you get the two parties who you have successfully mediated with hopefully to actually, write down a formal agreement of what it is that they've agreed. And I suppose then it just means that it helps take away any ambiguity or oh, but they said this and you said that and because it's all written down.
So it sounds like such good advice. Well, Simon, I could talk to you about negotiation skills all day but sadly we are running out of time. So I'm at the point where I try to ask every guest on the show whether you would like to share a non fiction book recommendation with us or if you'd prefer to share a confidence building tip.
Well I think I will probably share a confidence tip with you. The confidence tip I would say is to plan. Ensure you make time to really understand what and how you want to achieve, what your goals are and also their mindsets and then put them into practice. And the more you practice,
the more confident you'll become. And effectively, knowledge with practice equals confidence. Confidence with a little bit of bravery equals control. Planning is the essential part of the process. And in fact, statistically, well, not statistically, but you know, with what I've done with negotiation, 85 percent of your time should be spent on planning because the more you plan, the more you'll understand and have the facts and the confidence to the degree, if you've planned your moves, et cetera.
You're probably going to know what the outcome of the negotiation is before you've actually even entered the room.
Really powerful advice to end our time together today on Simon. But finally, before I say goodbye completely, for anyone who's been listening today who would love to learn more about your work and your services, and perhaps bring in one of your fabulous negotiation skills workshop into their organisation.
What is the best way of them getting in touch with you?
Very easily, either email me at firstname.lastname@example.org. Or simply connect with me via LinkedIn.
Brilliant, and I'll make sure I pop links to your email address and to your LinkedIn profile in the show notes. All that leaves me to say is a huge thank you for your time today. It's been fantastic to have you on the show
Thank you very really enjoyed it.
That brings us to the end of today's episode. I would love to hear what you thought of it, please do let me know. You can always reach me on LinkedIn, I'm there as myself, Fay Wallis, so that's F A Y and then W A L L I S, or you can drop me an email and I have my email address in the show notes for you.
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Thank you so much, and I am looking forward to being back again next Friday with the next episode for you.