Interview: Why negotiation is such a hot topic for Recruiters.
An interview discussing Negotiation in recruitment, with Giles Morgan, founder of Kahvay by Jon Brooks from the 'Added Value' Newsletter.
The Weekly Walkaway highlights negotiation in its ‘good’, ‘bad’ and sometimes ‘downright ugly’ forms. Issue No. 66 (23rd February 2024).
This Week in your Weekly Walkaway
As we recover from our respective half-term breaks (note ‘recover’ - isn’t always the way when you’ve got kids!) It’s an easy week for us on The Weekly Walkaway…
An interview with
, founder of Kahvay, on one of our favourite subjects:Why negotiation is such a hot topic for all recruiters.
The Interview with Giles was initially published by
on ‘Added Value’, a newsletter dedicated to ‘pricing and value’ for the recruitment industry, and is well worth subscribing to if you haven’t already come across it…Either way, without further ado, Enjoy!
Q: Why is it 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.
I’d put it to you that the most effective Recruiters negotiate constantly. They are negotiating a minimum of 30 times a day, every day.
They negotiate between candidate needs and client needs. Bringing these different parties together in marriage, fixing ‘their’ issues and resolving their differences. They negotiate the needs of their clients' HR and Procurement teams, their own internal stakeholders, shareholders, managers and their brothers and sisters who sit alongside them, sometimes competing for the same talent. This doesn't even take into account their family, friends, and everyday life.
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. In fact, I’d even go so far as to suggest, for most, that is as far as their learning journeys go in the recruitment industry. 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! Simples.
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 increase just 1% of their negotiation skills, then that 1% is transferred directly to the company's bottom line.
Can you imagine the return on investment? And just by changing behaviours.
Q: How would you rate recruiters' ability to negotiate, out of 10? How does this compare to other industries?
That is a great question. Jon and I’d love to dodge it, but I won’t. It is why Kahvay exists.
I’ve met and been lucky to have worked with some incredible negotiators in my time from many industries and, yes, some from within recruitment.
My first business partner, Kang Shik Kim, is a wonder. René Schripsema, a past and much-respected client of mine, is naturally gifted. Oh, and my wife, whose ability to manage the usual conflicts that come with having teenagers at home before she even turns on her laptop to deal with work, is just astounding!
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 agents, 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.
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.
This is backed up by our negotiation experience. We, like you, have been negotiating forever, but if we were to put a number on ‘negotiation as a service’ it has been 12 years where we have also had the honour to have worked outside of recruitment with big brand names like Unilever, Boots and Deloitte and with teams in HR, Procurement and Sales.
With this experience, and let's be frank, I’m speaking very generally; I’d rate recruiters, before negotiation training, 4 out of 10.
Breaking this down further, though, I’d say in 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.
In other industries as an example and again before training, I’d rate;
FMCG: 3 - 5
Grocery: 3 - 5
Management Consulting and Banking: 4 - 6
After appropriate experiential training that changes behaviours, these ratings improve by 2.
Q: How much better at negotiating do recruiters need to be? Does everyone need to become an expert in negotiation?
Oh, an easy one, Jon.. Much better. Recruiters need to be much better negotiators.
I can't stress enough that recruiters become better negotiators by just understanding that there is a difference between selling and negotiating. 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: 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 with 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.
At kahvay, we have given ‘it’ a name: ‘Lucy’. She is a monkey that lives alongside a human and a computer in our head. We all have them, but there are tips and tricks negotiators use to manage their emotions and, therefore, their Lucy. My top 3;
Plan. Plan. Plan;
FAFS: Flinch. Assess. Frame. Send
Feed your Lucy Bananas; Breath; I’ve got this; I’ve planned for this; It's just a game; it's not personal, etc…
Q: Can you share an example or two of how you've seen recruiters change their negotiation behaviour?
Two stand out in recent terms. Both highlight different behaviour choices well. Firstly, a cost price increase and secondly, negotiating in ‘Growth’.
CPI
Before: a team I worked with had been selling their cost price increases and did not understand why they never hit their objective. They were asking, justifying and trying to persuade their clients to accept. They asked for exactly what they needed and expected the client to accept it fairly. There was very little planning involved, and it was always uncomfortable, resulting in a conflict where the client just said ‘No’, seemed arrogant and made the team move below what they needed.
After: They planned what they thought their clients' walkaway was (the most the client could pay). They told their client, firmly and assertively, what the cost price was, and they opened with more than it was. They didn't sell. They were prepared for the client to say ‘no’; they understood it would be uncomfortable, but they had planned moves and concessions where they had planned to give satisfaction and employ reciprocity. Because they moved, the client moved. Because they moved, the client felt they were getting something, and the relationship improved. They achieved their objective. Simples.
Growth
Before: another team I worked with had been trying for a number of years to achieve deeper penetration of a long-term account. They delivered recruitment services into one country. Every year, they planned their sales presentations and spent a lot of capital trying to persuade their client to give them access to more countries. They had not achieved their objective and did not have a high enough level of relationship to achieve their aim.
After: They analysed what was important to their client. They spent time questioning their client and understanding their position. What cost them a lot.. What was of value to them.. They did a deep dive into who they would need to have a relationship with to achieve their objective. They realised they had relationships at the lower end of the organisational structure. They changed this. After building a relationship and the trust required and with the correct people, they brainstormed low-cost, high-value trades (what was important to them vs what was important to their client). Linked these issues and made conditional proposals that achieved two new countries and a 3-year contract extension.
Q: You talk about a negotiation compass in your training. Describe how that helps people to negotiate better.
Yes, so first, let me ask your readers to consider whether every negotiation is the same or different?
Do they negotiate the same way they would with a touristy market trader as they would with a trusted client? Do they negotiate the same way they would with a car dealer as they would with their employer?
The reality is that every negotiation is different, and every negotiation requires a different persona and a different set of behaviours.
In recruitment, today's competitor is tomorrow's collaborator, and unfortunately, today's collaborator is tomorrow's competitor.
Example: You might be in a 5-year contract where you are running an exclusive service where you are collaborating. Imagine now there has been a change at C-level and a new Chief Procurement Officer has come in, and maybe, because of shareholder need, they tell their team to squeeze all suppliers, including you, for 20% cost savings. Within an instant, that collaboration has now changed to competition, and with it, you will see your procurement contacts change their personality to achieve their 20% cost savings from warm to cold.
The compass is a framework that enables you to analyse the negotiation and decide which persona would be most appropriate for your circumstances.
By analysing the compass, you’ll also have an idea of what persona ‘they’ will be. Warm or Cold.
The compass is split in two. The West (Warm Red / Win/Win / Collaborative) and The East (Cold Blue / Win/Lose / Competitive).
On The West, you’d be more collaborative, warmer and open, while on The East you’d be colder, harder and tougher, and you’d be competitive.
There are four personas depending on the extremes of the analysis of the compass.
On The West, you have The Diplomat and The Engineer, and on The East, you have The Haggler and The Dealer.
Read more about the Kahvay Negotiation Compass here.©
These personae allow negotiators to adapt based on circumstances and help negotiators understand how to control the negotiation so that they are not exploited by the behavioural choices of their counterparts.
“Negotiation is not linear. Negotiation is an ever-changing game, where the rules change constantly”.
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. They will seem like they are on The West, but this is just soft behaviours. 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 will be planned, and the lower ranks will negotiate on The East because they can only say ‘No’ as they need to get higher authority for anything more. 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. Again, use PLANT. Power. Longevity. Advanced. Need. Trust. You will be able to analyse the people based on;
Power - their circumstances, level of authority and influence;
Longevity - how long have you been in a relationship? How long do you want to be in a relationship? Will you negotiate again;
Advanced - how complex is the deal, how experienced are they, have they been trained;
Need - who needs who more;
Trust - can you trust them with sensitive information or will they exploit you?
Q: Can you share one tip that recruitment leaders could use today to improve client negotiations?
Yes, stop selling. Start negotiating.
And that’s a wrap, folks. Thanks again to
for letting us wax lyrical about our favourite topic. Have a great weekend, and see you all again next Friday for the next installment of The Weekly Walkaway!