Negotiation Skills: An HR Executive’s Greatest Ally
If you’ve been reading my blogs, you’ve likely noticed a recurring theme. Many are focused on what managers can do to improve their negotiation skills or how a sales team can boost its customer or vendor relationships with stronger negotiating strategies.
There’s another key player within any organization who can and should leverage the power of negotiation – the HR executive. Today’s HR executive faces challenges that are very different from those in the past. Today, unhappy customers air their grievances on social media. Disgruntled employees leverage stricter discrimination laws. The #MeToo movement has put an even greater pressure on HR executives. Prospective employees demand higher salaries and better benefits. Company loyalty (going both ways) has dwindled, fostering more contention between management and employees. Organizations more frequently tighten their belts, leading to increased layoffs and pay cuts. Customers expect vendors to deliver goods expediently and at a lower cost.
A more tenuous and demanding role
The above scenarios put increasing demands on HR executives – to smooth the waters, mitigate lawsuits, more effectively negotiate salaries and benefits, and address a whole host of other issues. Though most HR activities aren’t so dramatic, effective negotiating skills still provide major benefits.
It’s an essential skill today’s HR executives need to hone. They often serve as a crucial mediator between board of directors and management, headquarters and branch offices, supervisors and employees, and the organization and other players such as vendors, partners, and stakeholders.
An Achilles’ heel for many HR executives is that they often negotiate within a vacuum. As a result, they may view such sessions myopically, focusing only on achieving the best outcome for their area of the business. However, the outcome can create a ripple effect throughout the rest of the organization that can be detrimental.
For example, an HR executive could be tasked with reducing or eliminating the company’s pension program in an effort to save money. The HR executive, often in tandem with their CFO, renegotiates the pension plan with their vendor (a financial institution). The new deal reduces company costs significantly but shortchanges future retirees’ payouts.
When the change is announced to employees, the backlash begins. They, particularly those close to retirement, are outraged and take their complaints to HR, social media, and other news outlets. The ripple effect begins. Employees start leaving the company or file a class action suit. Morale sinks. The company’s reputation is sullied. If the company trades publicly, stock prices could plummet, angering stakeholders.
Mitigating HR Issues with Proven Strategies and a Fail-Proof System
The above scenario happens in many companies. However, it is easily avoidable if you have the right strategies in a place and an effective system to reinforce them.
Sharpening negotiation skills requires preparation. It entails knowing what you want to achieve as well as identifying your deal breakers. Sounds simple enough. However, it is much more nuanced.
You’ve got to ask questions before you get to the negotiation. Here are a few to ponder:
How do I put myself in the other person’s shoes?
Have I considered the outcomes the other party wants and their ramifications? How will those outcomes impact the organization as a whole?
How do I gather critical intel that could potentially influence the entire negotiation? What can I do to keep it from spiralling out of control?
How can we take care of all involved parties with integrity?
Am I committed to collaboration to ensure that the negotiated agreement sticks?
It’s important to note that the negotiation doesn’t end when a deal’s been reached. You have to implement your system to ensure that it’s got staying power. At the very least, you want the system in place so you’ll be able to quickly and effectively address any bumps in the road when executing the negotiation.
As most HR executives will agree, it’s a challenging juggling act to appease all players, regardless of the situation. This is made even more daunting for HR executives, since they often need internal agreement before engaging the counterpart - even a disgruntled employee.
Run through Different Scenarios
While the above advice can strengthen your negotiation skills immensely, it won’t do you any good if you don’t consider the myriad HR scenarios you can, and likely will, face.
HR executives have to deal with a broad array of issues, many of which can pop up at a moment’s notice. The better prepared you are to handle them, the more confident you’ll be at negotiating your way to success. What’s more, you’ll increase the odds that everyone will conclude the negotiations satisfied.
One other issue that HR executives are exposed to more than the average executive is an emotionally charged environment. Remaining calm, respectful and attentive is essential to diffusing tension or preventing escalation. Working with a negotiation consultant can amplify one’s ability to remain calm and in control. In fact, the best negotiators embody what I like to call the N-Factor. The ability to exhibit empathy goes a long way in maintaining a composed, productive negotiation process.
In my work with executives, we run through as many scenarios as possible, role-playing to prepare for any situation. It makes sense. The professional athlete runs through how he or she intends to perform, considering any potential problems or hiccups. Then they create strategies to handle them, should they arise. It’s equally important for HR executives to consider all possible opposition, and determine how they’ll overcome it.
A Critical Skill to Use with Anyone
Typically, we tend to think of HR executives as only dealing with management and employees. Nothing could be further from the truth.
Today’s HR executive is not only required to work with management and employees, hiring and firing or enforcing company policies and procedures. Now, they’re often tasked with responsibilities that include things like negotiating contracts with vendors; serving as a liaison between the company and unions; navigating the legal minefields of employee litigation; and answering to the board of directors and other stakeholders.
All of these responsibilities require strong negotiation skills – the capacity to advocate persuasively and successfully. They necessitate the ability to manage discussions (which a negotiation technically is) regardless of personalities or agendas. Moreover, as we’ve touched on above, negotiations require a system to ensure they have staying power. An HR executive’s position involves a commitment and proficiency at nurturing and maintaining positive “human relations” – the other HR!
Finally, we know that collaboration is essential to a successful negotiation. The HR executive often is the mediator and charged with putting out fires on a daily basis. So it’s reasonable to expect them to have strong negotiation skills. Remember too that information sharing with authenticity, as well as listening with empathy, helps you as much as it does your counterpart. Build those skills and you’ll become an even more invaluable asset in your organization.
What are your biggest HR hurdles?