The power of BATNA in confident salary negotiations, “WU Executive Academy”
Vienna, Austria – Imagine going to your boss and requesting a 10% pay increase, only to be told: “That’s not possible – get back to work!” What happens next? There are two possibilities – either you leave for a new position with a bigger salary, or continue to work at the same job with the same salary, but the final outcome primarily depends on who has the better BATNA.
BATNA stands for “Best Alternative To a Negotiated Agreement.” If the negotiations break down, who has the better alternative?
Superior performance and more responsibilities are particularly important arguments in salary negotiations. However, if you consistently show the best performance and continuously enhance your areas of responsibility but have no alternative career options, your position and salary may well remain the same.
“You should think carefully in advance about your arguments for a salary increase.”
Your BATNA strengthens your bargaining power. In negotiations, the winner is usually the person who brings the better option to the table.
An attorney who was seeking to hire a trainee associate invited the shortlisted candidates to the office for final discussions, and made the following announcement: “Dear candidates! We would love to take all of you, but we only have one vacancy. In front of you, you will find a piece of paper and a pen. Please write a number. This is the salary for which you are willing to work for us. The one with the lowest bid will start on Monday. “
In this case, the attorney clearly has the strongest bargaining power. Why? Because he has the better BATNA and can choose between several equal candidates.
Similarly, one of my friends works as Art Director at an advertising agency. After diligent preparations, she went to her manager to ask for a pay rise. Before she could finish, the boss interrupted her and pointed to a large stack of papers on his desk: “Do you know what this is, miss? 200 applications to do your job. Do you have any further questions?”
Your skills increase your BATNA
However, the balance of bargaining power does not necessarily lie with the employer. A headhunter of my acquaintance recently called a candidate and told him: “You are the only relevant candidate for my client. Please share your salary expectations with us.”
Your value on the labour market
The more unique your skills and network are, the more you will be in demand on the labour market. As your BATNA increases, you are likely to be offered more opportunities. In career matters, you cannot be “spoiled for choice” – if you have no options, you have to take whatever is offered.
While negotiating, you should also bear in mind that it is important not to use force to damage trust beyond repair. For a successful long-term relationship, the negotiations should be a win-win situation, which will benefit all concerned parties. Exerting pressure is usually counterproductive; blackmail is rarely recommended, and at best can only ever work as a very short-term strategy.
How can I strengthen my position?
You strengthen your position by developing your BATNA. Ask yourself: “What will I do if my request is rejected?” If you have attractive alternative options in mind, you will go into the negotiations suffused with self-confidence, serenity and calmness. During the discussion, you will know that there are no bad outcomes for you, and this will help you radiate inner strength. One way or another, you will win in the end.
Play your cards close to your chest
Be careful about how you disclose your BATNA during salary negotiations. If your boss learns that you have an offer from a direct competitor, you will need to be ready to leave the company immediately.
However, if your boss mentions her/his BATNA, you can certainly point out that the proposed option is not as good as s/he thinks.
An executive may advise an employee: “Feel free to accept our competitor’s job offer, but I assure you that you will not be happy there. The majority of their employees leave the company within three months because the work environment is so bad. You are still young. Maybe you need this experience, but I would like to give you some friendly advice. If you’re unhappy there, give me a call and perhaps we will have a vacancy for you.”
In conclusion, the basis for a successful career consists of demonstrating good performance, taking responsibility and establishing a strong professional network. In order to succeed during negotiations, you need a BATNA, which you should keep strong and up-to-date. With better alternatives in hand, you can enter salary negotiations with confidence at any time.
Pedersen & Partners is one of the fastest-growing, fully integrated Executive Search firms worldwide; it is 100% owned by its partners who all work full-time to serve its clients. The firm celebrated its 15th anniversary in January 2016, and to mark this occasion, it has created a timeline web page, featuring key milestones for the firm’s development and has released an anniversary video.
Conrad Pramböck is the Head of Compensation Consulting at Pedersen & Partners. Based in Vienna, Austria, he is responsible for consulting companies on all aspects of compensation, including providing companies with up-to-date market information on salary ranges and design of bonus systems across all industries and geographies. Prior to joining the firm, Mr. Pramböck held several senior positions in international consultancy firms. He started his career with a German Consultancy firm working in management consulting and later in the Compensation Consulting business unit based in Austria. For the following seven years he worked with one of the top Austrian Executive Search firms as the Head of Compensation Consulting. He was responsible for all international compensation consulting activities and developed and maintained an international compensation database in 40 countries.
Pedersen & Partners is a leading international Executive Search firm. We operate 56 wholly owned offices in 52 countries across Europe, the Middle East, Africa, Asia & the Americas. Our values Trust, Relationship and Professionalism apply to our interaction with clients as well as executives. More information about Pedersen & Partners is available at www.pedersenandpartners.com
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