Expert view: how to master negotiation
Q&A with Giles Morgan on negotiation strategy
You can deliver the perfect pitch to a client, but if you don’t back it up when the time comes to negotiating fees then you lose out.
Giles Morgan, founder of Kahvay, is the leading negotiation expert in the recruitment industry. I asked him about the importance of negotiation, how our clients negotiate with us, and how we can negotiate better.
Q: Why is it so important that recruitment leaders are good at negotiating?
Simply put, Jon, it's their job! Recruiters are ‘King and Queen makers’, fixers and dealers. They are negotiators. Selling gets them to the table. Once they are at the table, they are negotiating, Fact! And selling and negotiating are two very different things that, although linked, are opposites.
The problem, Jon, is that most recruiters are not trained to negotiate. They have no idea that negotiating and selling are two very different skills. Again, yes, they are linked, but very different. And most are only trained to sell. And so they sell... And they sell... And they sell. Which just weakens their position.
You see, at the point where their counterpart wants to buy, it is not in their interest to agree with the salesperson; even if they do, they won't. If they do, they know they weaken their own position, so they get recruiters to sell and sell and sell and so strengthen their own position!
So why is it so important that recruitment leaders are good at negotiating?
If recruitment leaders are skilled negotiators, then their teams become skilled negotiators. If their teams are skilled negotiators, then they will achieve much better outcomes, longer more trustful relationships and growth.
In fact, if recruitment leaders increased just 1% of their negotiation skills, then that 1% is transferred directly to the company's bottom line.
Q: How much better at negotiating do recruiters need to be?
Oh, an easy one, Jon. Much better. Recruiters need to be much better negotiators.
I can't stress enough that by just understanding that there is a difference between selling and negotiating, recruiters become better negotiators. At first, it's a shock but incredibly impactful.
Recruiters can become the best they need to be when they add these skills;
Ability to use a planning framework and then plan much, much more;
Competence in controlling emotions, their own and understanding how to read others;
and learning the common language of negotiators.
Q: How would you rate recruiters' ability to negotiate, out of 10?
The recruitment industry is beautiful and multi-coloured. It is culturally diverse and full of differing skills, abilities, levels of education and experience. But we observe the same traits globally. Recruiters sell too much.
Kahvay was founded on 20 years of recruitment experience. With this experience, and I’m speaking very generally, I’d rate recruiters, before negotiation training, 4 out 10.
Breaking this down further, though, I’d say big business, like RPO and MSP, you’d find more commercially minded collaborative personalities who are targeted on growth so the rating increases to a 5 and sometimes even a 6, but in small business terms, like 360 recruiters, the rating would drop to a 3 - 4 and where you’d find your most competitive personalities.
After appropriate experiential training that changes behaviours, these ratings improve by 2.
Q: When you were a recruiter, how did you negotiate?
I thought I was a great negotiator back in my time; a big biller. But what I know now... Wow... I was just a super competitive salesman, out to beat my monthly targets and go home with my commission.
I’m being ultra-hard and unfair on myself. A lot of what I did was appropriate. I learned from my mistakes and from those around me, but wow.
I look back and reflect on my days in recruitment with regret sometimes; if only I knew then what I know now. What could have been… from those constant conflicts between agent, internal recruiters and candidates, to that software deal before the Credit Crunch, to selling the business. I always reflect back and wonder what I could have done differently.
Q: A lot of people say they find negotiating uncomfortable. What do you suggest recruiters can do to avoid this feeling when dealing with a client?
Firstly, we have to acknowledge that negotiation is uncomfortable. If we find we are feeling comfortable in a negotiation, then we need to consider two things;
What are ‘they’ doing to us? We are being manipulated! Tactics are being used against us. We are being made to think we are doing well. They are increasing our levels of satisfaction and the feeling of winning, while they focus on the cash. They are stroking our ego;
We are not negotiating, we are selling. We are being too soft, probably talking too much, and giving away too much information and value. It feels good (comfortable) to give. But what are we getting back in return? It feels uncomfortable to take, but we need to take it before we give to make sure we are maximising our deals.
Once we have become conscious of this, we can start to become more comfortable being uncomfortable.
So we should not avoid the feeling. We should welcome it. But we need to manage it and ensure it does not control us.
Q: What's happening on the other side of the table? How are our clients approaching negotiations with us?
Great question Jon. The fact is that getting into your counterpart's head is key to being a better negotiator. We use our ‘Lighthouse’ to help illustrate this. We ask our clients to climb to the top of their metaphorical lighthouse. To look down on the situation from a different perspective.
On the whole, our counterparts are exactly the same as us. We are much more equal than we think.
Differences begin to appear when we take into account how well-trained and how experienced our counterparts are.
Unfortunately, our HR opposites are very under-invested in and, without any training, generally negotiate from their heart. It’s all selling, fairness, instinct and emotion, and they can take issues personally. Many conflicts arise from mismanaging their expectations and HR not generally being comfortable managing yours. When trained, they become formidable, tough negotiators, and the more training they get, the more they are promoted into C-Level roles;
Our Procurement counterparts will have been trained. They will even have a little book of rules and tactics. They will negotiate these rules firmly. They will say ‘No’. They usually are targeted on cost/price or single variables. The more senior they become, the more training they receive, and this is where they take the lead. The more senior they become, the more authority they get and the more interested in value rather than just cost.
Both of the above have their most difficult negotiations with the third counterparty. Their Stakeholders.
The truth is that everyone is different, and it is easy to generalise for the sake of your interview, Jon but it is the making of a fine negotiator to realise they need to analyse their negotiation and the people they will negotiate with or against to achieve the most appropriate outcomes.
Q: Can you share one tip that recruitment leaders could use today to start improving their negotiations with clients?
Yes, stop selling. Start negotiating.
A big thank you to Giles for sharing his expertise and suggestions with us. Let me know in the comments which bits you found most valuable.
If you want to learn more about negotiation strategy and how you can apply it to your recruitment business, I recommend signing up for Giles’ weekly insights here.
Jon
P.S. On the subject of interviews, I joined Robin Choy on his Modern Recruiter podcast last week to discuss all things recruitment pricing.
Why listen? Robin asked some great questions, he has loads of insights of his own around recruitment and pricing, and he got me to share some actionable insights (i.e. stuff you can do to improve your own pricing).
You can catch up on the interview here.