Everything you need to know about negotiation skills

In today's competitive Philippine job market, strong soft skills can help you stand out from other job seekers. Negotiation is one of these essential soft skills.

A negotiation involves two or more parties entering into a dialogue to reach an acceptable solution. It's a give-and-take process that usually requires compromise from each party. A negotiation may result in a contract, verbal agreement, or other forms of understanding.

We explore negotiation skills in this guide and explain how to improve them. Here's what we'll cover:

• What are negotiation skills?
• Why are negotiation skills important?
• Negotiation vs influence: What is the difference?
• What are the qualities of an effective negotiator?
• Tips for improving your negotiation skills
• Conclusion
• FAQs

What are negotiation skills?

Negotiations can occur between departments, managers, and colleagues in the workplace or between company representatives and clients. Project managers may negotiate project specifications and deliverables with stakeholders, while employees may request flexible work arrangements.

Before you start working for a company, you might negotiate your job scope or salary with the hiring manager. Effective negotiation skills can help you achieve an outcome that benefits you.

Negotiation styles are a toolkit for reaching mutually beneficial agreements. Some examples of negotiation skills include communication, active listening, emotional intelligence, problem-solving, planning, decision-making, and persuasion.

Below are a few situations where you might engage in negotiation techniques in the workplace:

• You could negotiate a project timeline with your team leader or manager.
• You could negotiate a pay rise after a promotion.
• You could negotiate with your manager for a few days off to deal with family matters.
• You could negotiate contract terms with a client.

Why are negotiation skills essential?

Negotiation skills can help companies achieve their business objectives. Let's look at a few reasons why negotiation skills are important in the workplace:

• Building relationships: People may have different perspectives. Negotiation skills help you reach a mutually agreeable solution. These skills seek to create value and goodwill and build long-term relationships.
• Resolving conflicts: During a negotiation, the parties make concessions to arrive at a solution that respects their opinions and interests. This allows them to minimize the negative impact of a disagreement to achieve conflict resolution. 
• Achieving goals: Good negotiation skills enable businesses to overcome problems that may prevent them from reaching their goals. They contribute to an environment of business success and increase the chances of future transactions. 

The importance of negotiation extends beyond the confines of the workplace. Negotiating skills also provide practical advantages that can positively impact your personal life. They can help you solve relationship problems, manage conflicts, and even get a salary increase or a better job.

Negotiation vs influence: What is the difference?

People sometimes use the definition of negotiation skills to explain influencing skills. But the two terms don't mean the same thing. A negotiation seeks a two-way compromise. Influencing means persuading someone to do something. Although you can use influence tactics within a negotiation, negotiating isn't only about influencing the other party.

Let's look at an example to understand the differences between negotiation and influencing skills.

Suppose you're attending a performance review where there's usually a discussion about salary. Since you've been doing your job well, your manager offers you a salary increase. Then, you make a counteroffer and reach a compromise. Here, you're using your negotiation skills to get a better offer.

Let's say you receive a poor performance review instead. Your manager doesn't think you deserve a higher salary, but you ask for it anyway. So, you need to influence or persuade them to give you a raise.

What are the qualities of an effective negotiator?

Here are several key skills that can make you a great negotiator:

1. Communication

Clear, concise, and persuasive communication skills are vital in a negotiation. It enables you to eliminate misunderstandings and doubts that can prevent you from reaching a mutually agreeable solution.

Also, make sure you use the right negotiation style for the specific situation. The five main negotiation methods are collaborating, compromising, competing, accommodating, and avoiding.

2. Emotional intelligence

Emotional intelligence is recognizing another person's feelings and controlling your own. Understanding the emotional dynamics during a negotiation helps you maintain composure, build rapport, and focus on the core issues. Emotional intelligence is a critical tool for building trust and navigating challenging conversations.

3. Planning

It's essential to think ahead and devise a plan before a negotiation. To prepare yourself properly, you need to research the subject matter, determine your desired outcome, and anticipate counteroffers. You should also have at least one backup plan if you and the other party fail to reach a negotiated agreement.

4. Value creation

An effective negotiator focuses on creating value. This involves identifying shared interests and potential solutions that satisfy all parties involved. Try to devise alternatives that cost you nothing and benefit the other party. For example, a company could negotiate for three smaller weekly shipments instead of two larger ones to reduce warehousing costs.

5. Expectation management

Expectation management involves finding the right balance between steadfastness and collaboration. Ensuring that both sides clearly understand each other's goals and expectations is important during a negotiation. If you can't reach an agreement with the other party, try adjusting your expectations.

6. Patience

A negotiation can sometimes take a long time. This is especially so if it involves counteroffers and renegotiation. Avoid rushing into an agreement that could lead to a bad deal. A skilled negotiator practices patience and properly assesses the situation to find ways to achieve the best possible outcome.

7. Active listening

Active listening means focusing on the other party's opinions and expectations while waiting for your turn to speak. Understanding the perspectives of others enables you to stay engaged in the discussion and take advantage of important information. You can use techniques to recall details and concerns from a negotiation, such as clarifying questions and summarizing.

8. Problem-solving

Problem-solving is identifying a problem, devising possible solutions, and taking the best course of action. Different problems may require different approaches. So, be open to compromise and find a solution that's agreeable to all parties.

9. Decision-making

A good negotiator is adept at evaluating options quickly and acting decisively. Being confident and assertive removes uncertainty and stress, which the other side of the negotiation can use to their advantage.

For example, if you experience analysis paralysis or decision fatigue in a negotiation, you might accept unfavorable terms to escape the stressful situation.

Tips for improving your negotiation skills

So, what do successful negotiators do to hone their skills? Check out these helpful tips on how to improve negotiation skills:

1. Create a system to keep track of your negotiation skills

To become a good negotiator, take advantage of every opportunity to practice your negotiation skills. After each negotiation, reflect on what went well and what didn't. Analyze your performance and identify areas for improvement, such as communication and emotional control.

Also, consider other approaches you could have taken and their possible outcomes. To keep track of your negotiation skills, maintain a detailed record of failed and successful negotiations.

2. Master value creation

Adopting a collaborative approach rather than a fixed-pie mentality is a good idea if you want to improve your value-creation skills. In a negotiation process, a fixed pie means that one side wins and the other loses. Learn how to identify both parties' underlying interests and frame concessions to move towards a mutually agreeable outcome.

3. Manage your emotions and understand others

An effective negotiator can regulate their emotions and stay composed under pressure. Practice self-awareness to recognize your emotions and try to keep them under control. It's also important to develop empathy to help you understand the other party's emotions and respond constructively.

4. Build confidence

Thorough preparation makes you feel ready and confident. You can prepare for a negotiation by doing research, setting clear goals, and anticipating potential challenges. Celebrating little and big negotiation wins can also help bolster your confidence.

5. Sharpen your skills

There are many things you can do to sharpen your negotiation skills. Consider practicing negotiation in low-stakes, role-play situations with your family and friends or participating in debates and discussions to improve your communication and persuasion skills.

You can also learn about negotiation from articles, books, online courses, and other educational resources.

In summary

Good negotiation skills can benefit most roles within an organization. They're especially important if your job requires you to negotiate regularly with suppliers, clients, or stakeholders.

If you're an effective negotiator, you can help your company secure favorable terms in contracts while maintaining long-term relationships with clients or vendors. This can increase your value to your employer and benefit your career.

To become a great negotiator, you need to develop soft skills such as communication, active listening, problem-solving, planning, emotional intelligence, and decision-making.

Additionally, you can improve your negotiation skills by controlling your emotions, mastering value creation, practicing negotiation, reading books and articles, attending an online course, and keeping track of your progress. Start building your negotiation skills now to open doors to your desired goals. 

FAQs

1. What are the key skills for successful negotiation?
   ⁠Essential negotiation skills can include communication, planning, problem-solving, emotional intelligence, active listening, decision-making, patience, expectation management, and value creation.
2. How can I prepare effectively for a negotiation?
   ⁠To properly prepare for a negotiation, you need to research, set clear goals, anticipate counteroffers, and devise one or more backup plans. Having good negotiation strategies can also make the process smoother.
3. What are some common negotiation mistakes to avoid?
   ⁠Making a conscious effort to avoid negotiation mistakes can increase your chances of success. According to Harvard Law School, common negotiation mistakes include:
   -⁠You fail to prepare yourself thoroughly.
   -⁠You focus on competing instead of collaborating.
   -⁠You rely too much on cognitive shortcuts.
   -⁠You let your emotions get the better of you.
   ⁠-You take ethical shortcuts.
4. How can I deal with difficult personalities during negotiations?
   ⁠Sometimes, you may find yourself negotiating with domineering, aggressive, or unreasonable people who can't control their emotions. Here are some tips for dealing with challenging personalities:
   -⁠Know your boundaries.
   -⁠Prepare solutions beforehand.
   ⁠-Hold the meeting in a private setting.
   ⁠-Stay calm before the meeting.
   ⁠-Make sure the other party is aware of the consequences.
   -⁠Be assertive.
5. What tactics can I use to create value for both parties?
   ⁠Using collaborative negotiation rather than the fixed-pie approach is essential to creating value for both sides. You also need an in-depth understanding of both parties' interests and a well-planned concession strategy that can lead to a mutually beneficial solution.
6. How can I improve my active listening skills for negotiation?
   ⁠Follow these tips to become a good listener in negotiations:
   -⁠Focus on the intent of the discussion.
   -⁠Avoid making judgments.
   -⁠Pay attention to body language.
   -⁠Give encouraging verbal cues.
   -⁠Clarify and paraphrase information. 
   -⁠Share a summary of what the speaker has said. 
7. What are some tips for managing emotions during negotiations?
   ⁠Be mindful of your emotions to keep them under control during a negotiation. When your emotional temperature gets too high, you can calm yourself down by taking a deep breath, thinking positive thoughts, diverting your focus, or taking a break.
8. How can I build confidence in my negotiation abilities?
   ⁠To become a confident negotiator, learn how to plan before a negotiation. Study the subject matter in detail, determine the outcome you want, and consider any potential obstacles that may come up.
   ⁠Doing your homework beforehand can help calm your nerves. You can also build confidence by rehearsing your talking points in front of the mirror or with a friend or mentor.
9. What resources can help me learn more about negotiation skills?
   ⁠Many resources, such as books, articles, videos, podcasts, and online courses, can help you with your negotiation training.