There comes a time in any employer/business owner’s tenure that employees will engage in negotiating either increase, retrenchment packages or conditions of employment. This is often conducted through a representative Trade Union. These negotiations are often superseded by a long letter that contains various demands.
Employers are often reluctant to engage meaningfully with trade unions as they often have the misguided perception that the process is futile and will ultimately end up in industrial action.
I find it important to differentiate the list of demands into “needs” and “wants” in order to determine what are necessities and what are luxury’s items on the list.
This will enable you to get to the crux of the negotiation far sooner, as time is ultimate of the essence. Naturally, informal discussions with approachable staff members/shop stewards will soon give you a fair idea as to what the actual “needs” are on the list and what the “wants” list.
The employer can then determine which of these he is able to negotiate on, afford, and those that are unrealistic.
Key aspects of any negotiation are the following:
- Preparation
Ensure you are well prepared before entering the negotiation. If you intend relying on financial constraints to support your position, ensure you have financials to back this up. Audited financials are better than management accounts.
Research other wage offers within the industry to get a realistic idea of what the likely figures are.
Set clear goals. Have your line in the sand, ensure whatever you do ultimately offer, you can afford! Empty promises will simply destroy credibility.
Anticipate their response. Ensure you are ready for their offer and that you have anticipated your counter offer. Often you can’t afford something on the “needs” list but you can afford something on the “wants” list. Use that to strengthen your counteroffer and build the perception of good faith.
Don’t be afraid to have demands of your own. This is a negotiation and you are entitled to have demands of your own. Often you can justify a bonus by linking it to performance outcome. Mutual gain is the key here. Think WIN-WIN!
2. Leave emotion at the door
Nothing kills a negotiation like emotion. If you want to reach deadlock this is a sure-fire way of getting there fast. Separate the people from the problem. Stay calm and collected even if the other party doesn’t. Don’t be afraid to take a break if emotions are starting to flare out of control.
You are not required to give an answer on a counteroffer immediately, nor should you. Take your time to consider it, construct a reasonable counter-offer if necessary.
Remember! You will have to work together after the negotiations are settled and concluded, don’t say things that you will regret.
Use reason and facts, not pressure to reach your goal.
3. Find Common Ground
People are far more likely to agree if there is a perception that they are gaining from the negotiation. Language is key, using the term “we” when referring to the business creates inclusivity and as such a shared responsibility. If everyone feels they have a stake in the future of the business they are far more likely to be reasonable. You foster this sentiment.
Go for the gold when the opportunity arises! If you are able to agree with a staggered wage increase of the next five years at a reasonably affordable percentage. Financially, you are able to plan for the next five years at a consistent rate and lock in an agreement for that period, you won’t find yourself back at the negotiation table the following year.
In conclusion, apply the principle of BATNA.
The Best Alternative To a Negotiated Agreement – the lowest acceptable value (outcome) to an individual for a negotiated agreement.
Have your own BATNA – your breaking point, line in the sand.
Understand their BATNA – Their lowest acceptable increase.
This will give you a fair idea of where the deadlock zone is when negotiating.
SEESA Pty Ltd offers invaluable courses to employers, staff and business owners that can assist. Negotiations with Unions can be daunting, but if you understand the principles and legislation with respect to Unions and Strikes, you will have the advantage when negotiating. Enhancing your negotiation skills will save you money, and who knows, you may even start enjoying it.