Master contract negotiation to get what you deserve
You have lots of requirements when it comes to job hunting. You’re looking for a position within a certain distance of your home. You want to be working in a field you’re passionate about that will lead to a job you love. But more than anything, you want to be compensated fairly.
Securing a new job is only half the battle.
What is contract negotiation?
Contract negotiation is a discussion two parties undertake in an effort to reach a resolution. When it comes to business and hiring, contract negotiation typically involves salary and benefits, such as paid time off, health insurance and flexible hours.
After a company has reached out to offer you a position, you need to develop a strategy for how to negotiate a contract. Considering that you’ll probably remain in your new position for at least a few years, you absolutely must make sure that you’re getting everything you want from your employer from the get-go.
How to negotiate a contract
Getting what you want out of a contract is all about communication – negotiation is a conversation between you and another human being as you try to come to a mutually beneficial agreement. You should have your end goals in mind, but you should also know in advance what you’re willing to be flexible about. Above all, approach the conversation with grace and good humor. You don’t need to be hostile or view the person you’re negotiating with as an enemy, because they aren’t. They want to hire you, and you want to work for them. You just need to settle on the numbers.
Contract negotiation skills
While you can and should adjust the minutiae of your contract negotiation strategy for each potential employer, there are eight elements you should build your expectations around.
1. Have your end goal in mind
What’s your ideal salary, and how did you get that number? Examine your past experience and respective salaries before you begin contract negotiations. You’ll want to keep regional differences in mind; the job that pays $75,000 in one region might only pay $60,000 in another. Then, look at your finances. How much money do you need to not only cover all of your expenses, but to start generating wealth and saving for retirement? When you’ve finally figured out your goal salary, know without question that you won’t accept anything less than this during a contract negotiation.
2. Be realistic
Understanding exactly what skills you bring to the table is a key point of contract negotiation. Author and entrepreneur Keith J. Cunningham suggests viewing contract negotiation as an agreement that will benefit both parties. This means leveraging your existing skills and achievements. What can you do that makes you worth $80,000, $90,000 or $100,000 per year to this company? Are you an expert at workflow who will develop a new, more efficient process? Did a recent conference presentation leave you in a position to bring in a lot of new clients?
You should always know your worth, but researching the company and its industry will help you determine how much you should ask for.
3. Realize that everything is negotiable
Has the company you’re interviewing with said that there’s a set cap on your position’s salary? Jeff Cochran of Shapiro Negotiations is a master of negotiation and a frequent speaker at Business Mastery events, and he stresses that everything is negotiable. Keep in mind that the reason you’re negotiating is because there are so many variables in play, so don’t think of anything as final until you’ve signed an agreement.
Jeff also recommends that, rather than making big leaps in your asking price during contract negotiation, you move your number up incrementally. Big jumps in numbers risk alienating your future employer; instead, move upward in small, strategic sums until you find a salary that makes both parties happy.
4. Think beyond your salary
We often think of contracts purely as documents that establish how much we’re paid, but there are many other things to consider. When determining how to negotiate a contract, don’t forget to factor in perks like bonuses, benefits or flexibility to your new position to enhance your salary. Consider your lifestyle. How many vacation days is your prospective employer offering you? Can you negotiate a more powerful title for your résumé? Have you been offered stock options that work for you and your goals? Are you aligned with the company’s core values? Consider all these factors during contract negotiation and don’t make the mistake of focusing solely on the numbers.
5. Be prepared to walk away
There will be times when even your contract negotiation skills can’t produce the desired result and you need to walk away. What does that look like? It’s entirely up to you, but planning ahead will help you decide what you will and will not accept. If an organization is not meeting your needs financially or otherwise, and shows no signs of budging on the elements that are most important to you, then it’s time to thank them for their time and move on to something else. This is the part of negotiation that is hardest to reach, and the back and forth can waste your time and the company’s. To prevent that waste, have a clear vision of your goals, your contract needs and where you need the two to align for ultimate job fulfillment.
6. Know how to present yourself
Whether you’re negotiating a new contract or revising your current one during an annual review, be conscious of how you’re presenting yourself. Dress appropriately in an outfit you feel powerful in. Approach this contract negotiation with confidence: Sit up straight with your shoulders squared, keep your hands and feet still and make eye contact. You’re here to obtain the salary you want, but remember that you are trying to give both parties what they want during contract negotiation. Observe the posture of the person you’re negotiating with as well as how they are responding to your discussion. Doing this helps you build rapport, and when the person sees you as organized, professional and self-assured, they’re more likely to trust your worth and give you exactly what you want.
7. Get it in writing
No matter how strong an instant connection you believe you’ve made with your future employer during contract negotiation, you still need to make sure you get everything they promise in writing. In some cases, an employer will tell potential hires they will revisit certain requests 60 or 90 days after they’ve been hired or will promise certain perks that aren’t in the contract. Do not accept this at face value. Protecting yourself is one of the most important contract negotiation skills you’ll ever learn, and the best way to do that is to make sure everything you discuss is guaranteed in writing before you accept the job offer.
8. Make sure everything is fully explained
As you get deeper into contract negotiation and are presented with an offer, make sure you fully understand it. It’s easy to get excited about your new position, especially if you really get along with your new bosses and are receiving the salary and perks you want. However, if anything is unclear or not present in your contract, this could lead to big problems down the road. Point out areas of ambiguity in the contract or address the fact that your job title or right to work from home two days a week is not spelled out. While you may need to allow your new employer to make some adjustments to the contract after you’re hired, you need to know exactly what the parameters are and approve them.
Learning how to negotiate a contract takes time and effort. But the more you practice the skills it requires, the better you’ll become at getting what you want and expressing your needs to the people around you.
Leverage your way to success through negotiation
Tony Robbins’ complimentary 7 Forces content series uncovers the negotiation skills and tactics necessary to achieve your ultimate business goals.