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Power Relationships and Negotiation

Power Relationships and Negotiation

One of the most interesting, and often the most overlooked, dynamics in the negotiation process is the power relationship that exists between the negotiating parties. Power relationships aren't like a game of blackjack, but there is one parallel: Who has the better hand?

Like the dealer, the employer has the better hand, because he has something the candidate wants -- the job opening. Because others want to play the game, the employer can pick and choose from multiple candidates, all of whom want the same job. But if the candidate has unique skills that are in high demand, the power-relationship dynamic shifts from the employer to the candidate. To use the blackjack analogy, the candidate's deck is stacked in his favor.

Economics 101

The law of supply and demand also plays a role in power relationships. For example, the healthcare industry is facing a national nursing shortage. Because the demand for nurses exceeds the supply, qualified RNs are in a far more powerful position to negotiate a better salary and compensation package than if there were a glut of equally qualified nurses competing for jobs. The reverse can be seen in other sectors where there's a greater competition for a small pool of opportunities. Given supply exceeds demand, candidates competing for these jobs aren't in a good position, power-wise, to negotiate a better employment package.

Generally speaking, the higher the level of skill and experience required to do a job, the more equal the power relationship between the employer and the job seeker and, therefore, the more room for meaningful negotiation. The reverse is true for jobs that require low skill levels and little experience.

Factors Affecting the Negotiation Process

Power relationships are also affected by other, less quantifiable variables that shouldn't be overlooked. The most important is how badly you need a job. Even the most skilled and experienced people can find themselves out of work through no fault of their own, and that changes the balance of power. On the flip side, the employer desperate to find a brain surgeon relinquishes negotiating power, especially if the prime candidate is happily employed.

What can you do to retain some power during the negotiation process? Consider taking these steps:

  • Audit your skills, training, experience and accomplishments. Objectively evaluate your skill sets and determine which can be transferred to other occupational categories. An experienced manager can usually apply those same skills across a broad array of occupations.
  • Develop a focused salary research strategy. Find out the compensation and benefit packages being paid for comparable skill sets for the occupation and geographic location you're targeting.
  • Do as much homework as possible on the nature and extent of the demand for the skills, training, education and experience within your chosen occupational field.
  • Determine your compensation range and the threshold below which you cannot go. This will help you avoid making a lateral move instead of an upward move.
  • During job interviews, be prepared to make your case for the unique value you bring to the organization.
  • If in the process of evaluating your skills, training, education and experience, you discover very little that puts you in a position of power, consider additional training, education or even a transitional job that would give you more valuable experience.

The more you have to offer an employer, the more power you'll have during the negotiation process, and vice versa.

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